ICE / Black Knight 2023
Intercontinental Exchange acquired Black Knight for $12B on May 4, 2022.
- Target
- Black Knight
- Acquirer
- Intercontinental Exchange
- Deal value
- $12B
- Deal type
- Mixed
- Announced
- May 4, 2022
- Sub-sector
- Capital Markets Tech
Transaction overview
- ICE announced the acquisition of Black Knight on May 4, 2022, for approximately $13.1B including debt, later renegotiated to $11.8B.
- Consideration was structured as cash and stock, with Black Knight shareholders receiving a mix of ICE shares and cash per share.
- The deal closed on September 5, 2023, after roughly 16 months of regulatory review.
- Black Knight provides software and data analytics to U.S. mortgage originators and servicers, covering roughly 60% of the U.S. mortgage market.
- ICE operates exchanges, clearing houses, and financial data businesses, including the New York Stock Exchange.
- ICE sought to combine Black Knight's mortgage servicing software with its own Encompass loan origination platform, acquired via Ellie Mae in 2020.
- The FTC challenged the deal; ICE agreed to divest Black Knight's Empower loan origination system and Optimal Blue pricing engine to satisfy regulators.
Why it matters
- The deal gave ICE software touching nearly the entire U.S. residential mortgage lifecycle, from origination through servicing.
- Regulators required divestiture of two Black Knight units before approving the deal, setting a precedent for vertical integration scrutiny in mortgage tech.
- The required sale of Optimal Blue to Constellation Software and Empower to a separate buyer reduced the combined entity's origination-side footprint.
Strategic rationale
ICE acquires mortgage servicing software and data platform after FTC-mandated divestiture of Optimal Blue, completing its end-to-end mortgage stack.
Deal terms & multiples
About Black Knight
Black Knight is a Jacksonville, Florida-based software and data company serving the U.S. residential mortgage industry. Its flagship MSP servicing platform processed loans for roughly 60% of the U.S. mortgage market by volume. The company also operated Optimal Blue, a product and pricing engine used by lenders, and the Empower loan origination system. Black Knight was spun out of Fidelity National Financial and traded on the NYSE under the ticker BKI before the acquisition.
- Founded
- 2014
- HQ
- United States
- Employees
- 6,000
- Prior funding
- Publicly traded (NYSE: BKI); spun out of Fidelity National Financial
- Key metric
- MSP platform serviced loans representing ~60% of the U.S. residential mortgage market
About Intercontinental Exchange NYSE: ICE
Intercontinental Exchange is an Atlanta-based operator of exchanges, clearing houses, and financial data services. It owns the New York Stock Exchange and operates futures markets across energy, agriculture, and financial products. ICE acquired Ellie Mae, the mortgage origination software company, for $11B in 2020, making mortgage technology a defined growth segment. The company reported roughly $7.3B in revenue for full-year 2022.
- Founded
- 2000
- Ticker
- NYSE: ICE
Advisors on the transaction
Public reporting named the following firms as advisors to the parties in the transaction.
- ICE
- Goldman Sachs, Ardea Partners (financial); Sullivan & Cromwell (legal). Black Knight: Morgan Stanley, Citigroup (financial); Wachtell Lipton (legal)
Frequently asked questions
Why did ICE acquire Black Knight?
ICE wanted to combine Black Knight's mortgage servicing software with its Encompass origination platform to cover more of the U.S. mortgage workflow. The combination followed ICE's $11B purchase of Ellie Mae in 2020.
How much did ICE pay for Black Knight?
The deal closed at approximately $11.8B, down from the original $13.1B announced in May 2022. The reduction reflected divestitures and renegotiated terms during the regulatory process.
Did regulators approve the ICE and Black Knight deal?
The FTC sued to block the deal in March 2023, citing mortgage software competition concerns. ICE resolved the challenge by agreeing to sell Black Knight's Empower and Optimal Blue units.
What assets did ICE have to sell to close the Black Knight deal?
ICE divested Black Knight's Empower loan origination system and Optimal Blue product and pricing engine. Constellation Software acquired Optimal Blue as part of the settlement.
When did the ICE and Black Knight deal close?
The transaction closed on September 5, 2023, roughly 16 months after the initial announcement on May 4, 2022.
What does Black Knight's MSP platform do?
MSP is a loan servicing system used by mortgage servicers to manage payment processing, escrow, and default workflows. It processed loans representing roughly 60% of the U.S. residential mortgage market.
Sources
- companiesmarketcap.com /black-knight/revenue/