Fidelity National Financial, Inc. · NYSE:FNF
Fidelity National Financial — Merger or Acquisition (February 2020)
16 slides from Fidelity National Financial's merger presentation, Feb 7, 2020
Slide 1: Investor Presentation: Acquisition of FGL Holdings
Investor Presentation Fidelity National Financial February 7 th 2020 Acquisition of FGL Holdings
Slide 2: Key Transaction Terms
2 Key Transaction Terms Transaction ▪ Fidelity National Financial, Inc. (NYSE: FNF) (“FNF”) to acquire FGL Holdings (NYSE: FG) (“F&G”) for $12.50 per common share representing a diluted equity value of $2.7 billion for 100% of F&G ▪ FNF already owns 7.9% of F&G primary shares ▪ 40% of the transactio
Slide 3: Investment Highlights
3 Investment Highlights ____________________ (1) Adjusted operating return on common shareholders’ equity, excluding AOCI . In acquiring F&G, FNF gains: • Diversification of FNF's cash and income streams and capitalization away from solely title insurance, in a transaction that is immediately accret
Slide 4: Estimated Sources & Uses
4 Estimated Sources & Uses Uses Cash to F&G shareholders (ex FNF) $1,505 Stock to F&G shareholders (ex FNF) 1,003 Acquisition price of F&G currently not owned by FNF $2,509 Purchase of F&G preferred and common stock from FNF subsidiaries 333 Purchase of F&G preferred stock from GSO (cash) (3) 334 Su
Slide 5: Transaction Impact
5 Transaction Impact Earnings ▪ 2020E adjusted EPS: >10% accretion (1) ▪ 2021E adjusted EPS: >20% accretion Leverage ▪ Estimated debt as a % of total capitalization at close: ~26% Dividend s / Buybacks ▪ No change to FNF’s current dividend or buyback policies Financial Strength Ratings (Moody’s / S&
Slide 6: Pro Forma Business Mix
6 Pro Forma Business Mix Pro forma FNF will be diversified and offer complementary products: FNF performs well when interest rates are falling and/or low, while F&G is more stable and benefits when interest rates rise Q3’19 LTM Operating Earnings Mix ($ in millions) ____________________ (1) Adjusted
Slide 7: F&G Highlights
7 F&G Highlights O v erview (1) Highlights (1) 23% Adjusted Operating Income ( " AOI " ) ( 3 ) CAGR since 2016 19.3% Return on Equity ( " ROE " ) ( 4 ) Approximately 475 % Risk - Based Capital ( " RBC " ) Ratio (1) • F&G is a life and annuity insurance company with a 50+ year history – Operations in
Slide 8: Selected Highlights
8 Selected Highlights F&G is a life and annuity inssurance company with a 50+ year history Serves retirement needs of the middle - income market Acquired by CF Corp in November 2017 for $1.84bn Transitioned investments team and portfolio management to T he Blackstone Group Recruited several new seni
Slide 9: Blackstone Competitive Advantage
9 Blackstone Competitive Advantage • Blackstone is one of the world’s leading investment firms with assets under management of approximately $ 5 71 bn (1) • Firm built on a strong foundation of intellectual and financial capital • Scale to handle large, complex transactions that others cannot • Lead
Slide 10: Contribution Analysis
Premium and other fees $7,541 $216 $7,757 Net investment income 216 1,200 1,416 Total revenue 7,800 1,339 9,139 After-tax adjusted operating income 852 302 1,154 Cash and invested assets 5,432 28,362 33,794 Total assets 10,419 36,117 46,536 Reserves 1,494 31,132 32,626 Market value (2/5/20) 13,790 2
Slide 11: Investment Highlights
11 Investment Highlights ____________________ (1) Adjusted operating return on common shareholders’ equity, excluding AOCI . In acquiring F&G, FNF gains: • Diversification of FNF's cash and income streams and capitalization away from solely title insurance, in a transaction that is immediately accre
Slide 12: Appendix
12 Appendix
Slide 13: F&G Product Overview
13 F&G Product Overview F&G’s diverse product offering leverages the company’s core competencies Fixed Indexed Annuities ("FIAs") • Type of deferred annuity product that is linked to the performance of a specific market index (predominantly S&P 500) • Flagship product with consumer value, risk mitig
Slide 14: F&G In-Force Book
14 F&G In - Force Book F&G’s attractive liability profile reflects prudent in - force management GAAP Net Reserves ( 1 )( 2) • Primarily FIAs and FAs; with growing indexed life book • Asset and liability cash flows are well matched • Surrender charges and market value adjustments protect against dis
Slide 15: F&G Investment Portfolio Overview
15 F&G Investment Portfolio Overview ____________________ Note : GAAP Fair Values as of 3Q19 on a consolidated basis. 43% 33% 5% 4% 4% 4% 7% Corporates Structured Securities Municipal Preferred Stocks Hybrids Alternative Assets Other 54% 40% 5% 1% < 1% NAIC 1 NAIC 2 NAIC 3 NAIC 4 NAIC 5 & 6 Investme
Slide 16: Sustained Spread Margins
16 Sustained Spread Margins F&G has shown a consistent ability to generate margins despite challenging environments Despite volatility in interest rates , F&G has a long track record of consistently managing FIA core spread • Ability to continuously re - price in - force annually by managing cost of
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