8-KOther Events

Fidelity National Information Services, Inc. 8-K Report, Corporate Update (Mar 27, 2008)

Filed March 27, 2008For Securities:FIS

Summary

Fidelity National Information Services, Inc. (FIS) announced on March 27, 2008, a significant update regarding the proposed spin-off of its Lender Processing Services (LPS) operations. FIS plans to contribute its LPS assets and liabilities to a newly formed subsidiary, LPS, Inc., which has filed a Form 10 registration statement. Following this contribution, FIS intends to distribute all shares of LPS, Inc. to its shareholders. As part of the transaction, FIS will also exchange new debt obligations of LPS, Inc. for an equal principal amount of its own existing debt, aiming to minimize financing costs and establish a desirable capital structure for both entities. The company is seeking a tax-free spin-off status from the IRS and expects the transaction to be tax-free for both FIS and its shareholders. Completion is subject to various conditions, including board approval, successful contribution of assets, debt exchange, necessary regulatory approvals, and favorable market conditions. Investors should monitor the Form 10 for further details on LPS, Inc., including financial statements and risk factors.

Key Highlights

  • 1FIS announces plans for a spin-off of its Lender Processing Services (LPS) operations via a new subsidiary, LPS, Inc.
  • 2LPS, Inc. has filed a Form 10 registration statement with the SEC in preparation for the spin-off.
  • 3FIS intends to distribute all shares of LPS, Inc. to its shareholders post-contribution.
  • 4FIS plans to exchange LPS, Inc.'s new debt obligations for its own existing debt to optimize capital structure.
  • 5The company expects the spin-off and debt-for-debt exchange to be tax-free for FIS and its shareholders.
  • 6Completion of the spin-off is contingent upon several factors, including regulatory approvals, board approval, and market conditions.
  • 7FIS notes its participation in the comment process for the New York Attorney General's Home Valuation Code of Conduct related to appraisals.

Frequently Asked Questions

The primary purpose of this Form 8-K filing is to update investors on the status of the proposed spin-off of Fidelity National Information Services, Inc.'s (FIS) Lender Processing Services (LPS) operations into a new, separate company called Lender Processing Services, Inc. (LPS, Inc.).

FIS shareholders are expected to receive all shares of LPS, Inc. as a distribution from FIS. The company is also working to structure a debt-for-debt exchange where LPS, Inc.'s new debt will be exchanged for FIS's existing debt, aiming for a tax-free transaction for shareholders.

Key conditions and risks include the final approval by FIS's Board of Directors, the successful contribution of LPS segment assets and liabilities to LPS, Inc., the ability of LPS, Inc. to complete its contemplated debt exchange, obtaining necessary governmental approvals (from the IRS, SEC, etc.), and prevailing market conditions for the new LPS, Inc. debt and the spin-off itself.

The New York Attorney General's settlement with Fannie Mae and Freddie Mac concerning appraisal practices, which includes a new Home Valuation Code of Conduct, could impact FIS's businesses that are subject to federal and state regulation, particularly in areas like mortgage lending, appraisals, and default management. FIS intends to participate in the comment period for the Code but cannot yet predict its ultimate effect on its operations.