First American Corp. (FAF) has offered to purchase its 74%-owned credit-information provider First Advantage Corp. (FADV) unit to increase "financial flexibility," ahead of the company's planned breakup.

The offer, which values all of First Advantage at $837 million, values the stock at $14.04 each, a 10% premium to Friday's closing price. First American's bid is 0.5375 share of its stock for each First Advantage share.

"Acquiring the minority interest in First Advantage will enhance our financial flexibility, reduce organizational complexity and provide greater overall operational efficiency," said First American Chairman and Chief Executive Parker S. Kennedy. The deal, if consummated, would boost First American's 2010 earnings, the company said.

First American and the rest of the title-insurance industry continues to be roiled by the housing-market downturn. The sector gets much of its business via mortgage originations, which have been slumping along with home sales. To help cope, First American has been tightening expenses and cutting personnel costs in an effort to improve efficiency.

The company in January announced it would split up, creating public firms focused on information solutions and financial services.

A First Advantage spokesman couldn't immediately be reached for comment.

-By Mike Barris, Dow Jones Newswires; 212-416-2330; mike.barris@dowjones.com