Intercontinental Trade has deepened its push into the US housing market information enterprise, hanging the biggest deal in its historical past by agreeing to buy mortgage software program firm Black Knight for $13.1bn.
Atlanta-based ICE on Wednesday mentioned it will pay $85 per share for the corporate, a roughly 35 per cent premium on Black Knight’s buying and selling value earlier than the deal was introduced. The $10.5bn money portion shall be funded by newly issued debt in addition to money available.
Shares in Black Knight jumped 14.5 per cent on the information whereas ICE, greatest generally known as the proprietor of the New York Inventory Trade, fell 4 per cent.
ICE’s transfer strengthens its grip on the info and software program that undergirds the US residential mortgage market at a time when house costs have been hovering.
Lower than two years in the past it purchased mortgage software program supplier Ellie Mae for $11bn from non-public fairness group Thoma Bravo, which was then ICE’s largest buy since chief government Jeffrey Sprecher based it in 2000 as an vitality buying and selling platform.
The acquisition additionally marked a decisive pivot away from ICE’s mainstay because the proprietor of a few of the world’s greatest inventory and futures exchanges, clearing homes and index suppliers. Mortgage know-how accounted for a fifth of ICE’s $7.1bn in whole income final yr.
Black Knight offers information on areas together with chapter and mortgage servicing to lenders. The deal offers the Florida-based firm a $16bn enterprise worth.
The acquisition would make it simpler for debtors and lenders to agree mortgages, whereas serving to householders decrease their month-to-month funds and lessening the chance of default, ICE mentioned.
Sprecher added that Black Knight fitted into his firm’s long-term technique of turning old-line monetary providers into profitable high-tech operations. “ICE’s easy mission has been to make analogue and opaque monetary transactions extra digital and clear,” he mentioned.
By way of a string of acquisitions, ICE has reworked into one of many world’s largest exchanges. It purchased the Chicago Inventory Trade in 2018, Interactive Knowledge Corp for $5.2bn in 2015 and NYSE Euronext for $11bn in 2013.
The Black Knight deal is predicted to offer $200mn price of price synergies over 5 years and to shut in 2023 pending regulatory approval.