CHICAGO (AFX) - Fitch Ratings on Friday downgraded credit ratings of LandAmerica Financial Group Inc., a provider of real estate transaction services, and its insurance subsidiaries, after the company completed its $251 million acquisition of a title insurance underwriter Capital Title Group Inc.
Fitch said the purchase price appeared high, and it is concerned about LandAmerica's ability to profitably execute its acquisition strategy. The ratings agency also said the title insurance industry is entering a downturn, and the acquisition could weaken LandAmerica's balance sheet.
Fitch lowered LandAmerica's long-term issuer default rating to 'BBB' and its senior-debt rating to 'BBB-,' among other downgrades of one notch. Fitch has a stable outlook on the ratings.
LandAmerica shares rose 58 cents to close at $64.69 on the New York Stock Exchange.
Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.