Intercontinental Exchange, Inc. (ICE) agreed to acquire Black Knight, Inc. The cash and stock transaction values Black Knight at $85 per share, or a market value of $13.1 billion.
The transaction will include a mix of cash (80 percent) and stock (20 percent). The cash consideration of $10.5 billion is expected to be funded with newly issued debt and cash on hand at the time of close. Stock consideration is valued at approximately $2.6 billon.
A definitive agreement has been unanimously approved by the boards of directors of both companies. The transaction is expected to close in the first half of 2023, pending regulatory approvals.
“Since our founding in 2000, ICE’s simple mission has been to make analog and opaque financial transactions more digital and transparent, beginning with commodity markets, extending across a large array of asset classes, and most recently working to help streamline the mortgage industry,” ICE founder, chair and CEO Jeffrey Sprecher said in a release. “Black Knight shares our passion for leveraging technology to serve customers and households, and, with our expertise in operating networks and marketplaces, our planned acquisition will bring to life a true end-to-end solution for the mortgage manufacturing and servicing ecosystem, benefitting aspiring and current homeowners across the United States.”
Black Knight, based in Jacksonville, Fla., has approximately 6,500 employees. The addition of its technology solutions, real estate and mortgage-related data assets, analytics, and its team of mortgage and technology professionals complements and strengthens ICE’s mortgage technology business, according to ICE. The combination will result in improvements in the mortgage lending process for borrowers and lenders by increasing automation and efficiencies while harnessing data that can help current homeowners lower their monthly payments and lessen the likelihood of default.
“Black Knight has been on a successful journey to transform the mortgage industry by providing our clients with powerful, interconnected solutions that help them achieve greater efficiency and better serve their customers,” Black Knight Chairman and CEO Anthony Jabbour said. “We believe this combination is the right next step in that journey. Black Knight and ICE share a common vision and commitment to deliver a better experience for our clients and the stakeholders we serve, and to ultimately streamline the homeownership process. By combining our expertise, we can deliver significant benefits to our clients and consumers by improving and streamlining the process of finding a home, as well as obtaining and managing a mortgage.”
“This transaction will benefit ICE, Black Knight, and our collective shareholders,” ICE Chief Financial Officer Warren Gardiner added. “Black Knight’s high-growth, recurring revenue stream will further complement our ‘all weather’ business model, while the strength of ICE’s balance sheet, and our combined cash flows, position this transaction to be accretive to adjusted earnings per share in the first full year.”