North American Title Group (NATG), a wholly-owned subsidiary of home builder Lennar (NYSE: LEN and LEN.B), today announced that it plans to combine its underwriter and the majority of its retail title business with States Title, Inc.
States Title is a Silicon Valley-based "insurtech" startup that uses predictive analytics to underwrite the title on a property nearly instantaneously, helping customers close real estate transactions safely, quickly, and inexpensively.
The deal, which is expected to close in January 2019 if pending regulatory approval in California and Arizona is obtained by year end, calls for States Title to acquire NATG's underwriter, North American Title Insurance Company (NATIC), and the majority of the retail business of NATG's national title agency, North American Title Company (NATC). The new company will continue to operate under the North American Title brand and Lennar will assume a substantial minority equity ownership stake.
"By partnering with North American Title, we accelerate our shared vision to build the title company of the future," said Max Simkoff, States Title's founder and CEO. "Buying a home, and refinancing that home, are among the most important financial decisions in a person's life. We believe that the experience of doing so should be fast, simple, safe and affordable. Title and settlement are critical to every real estate transaction. Modern technology and powerful analytics will supplement and enhance our associates' ability to deliver outstanding service to every single one of our customers."
"This transaction builds on our strategy of aligning with technology innovators to streamline and enhance the overall customer experience," said Eric Feder, Senior Lennar Executive, who will join States Title's board of directors. "Partnering with States Title keeps us at the forefront of innovation while maintaining the integrity of the title insurance that people have trusted us with for decades."
Max Simkoff will remain the CEO of the combined company, and the newly-formed management team will include current leadership from both States Title and North American Title, as well as new hires with relevant expertise. Title industry veteran Judd Hoffman, formerly President of the Direct Division at First American Title, has joined the new company as Chief Transformation Officer and Noaman Ahmad will join as Chief Financial Officer. Matt Zames, President of Cerberus Capital Management and former JP Morgan Chief Operating Officer, has joined the board of directors.
NATC's builder business, which delivers settlement services to Lennar's homebuyers, and a portion of its retail business, will remain with Lennar and operate as CalAtlantic Title. Approximately two-thirds of NATG's current associates will transition to the new company, while the balance will remain with CalAtlantic Title.