Adding Black Knight’s integrated solutions
significantly strengthens ICE’s mortgage technology ecosystem;
extends track record of digitizing vital networks
Intercontinental Exchange, Inc. (NYSE: ICE), a leading global
provider of data, technology, and market infrastructure, today
announced it has entered into a definitive agreement to acquire
Black Knight, Inc. (NYSE: BKI), a software, data and analytics
company that serves the housing finance continuum, including real
estate data, mortgage lending and servicing, as well as the
secondary markets. The cash and stock transaction values Black
Knight at $85 per share, or a market value of $13.1 billion, and
builds on ICE’s position as a provider of end-to-end electronic
workflow solutions for the rapidly evolving U.S. residential
mortgage industry.
The definitive agreement has been unanimously approved by the
Boards of Directors of both companies.
Black Knight, based in Jacksonville, Florida, has approximately
6,500 employees and is a long-time driver of innovation in the
mortgage industry. The company provides a comprehensive and
integrated ecosystem of software, data, and analytics solutions
serving the real estate and housing finance markets. The Black
Knight ecosystem adds value for clients of all sizes across the
mortgage and real estate lifecycles by helping organizations lower
costs, increase efficiencies, grow their businesses, and reduce
risk.
The addition of Black Knight’s technology solutions, real estate
and mortgage-related data assets, leading analytics, and its team
of mortgage and technology professionals complements and
strengthens ICE’s rapidly growing mortgage technology business. The
combination will result in improvements in the mortgage lending
process for borrowers and lenders by increasing automation and
efficiencies that lower the cost of obtaining a mortgage, while
harnessing data that can help current homeowners lower their
monthly payments and lessen the likelihood of default.
“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,” said Jeffrey C. Sprecher,
Founder, Chair and CEO of Intercontinental Exchange. “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 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,” said Anthony M. Jabbour,
Chairman and CEO of Black Knight, Inc. “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,” said Warren Gardiner, Chief Financial
Officer of Intercontinental Exchange. “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 share1 in the first full year.”
The transaction is expected to close in the first half of 2023,
following the receipt of regulatory approvals, Black Knight
stockholder approval, and the satisfaction of customary closing
conditions.
Key Financial Metrics:
- Transaction valued at $85 per share, or a total market value of
$13.1 billion, with consideration in the form of a mix of cash
(80%) and stock (20%).
- Cash consideration of $10.5 billion expected to be funded with
newly issued debt and cash on hand at the time of close.
- Stock consideration valued at approximately $2.6 billon based
on ICE 10-day VWAP as of May 2, 2022 of $118.09.
- Black Knight shareholders can elect to receive either cash or
stock, subject to proration, with the value of the cash election
and the stock election equalized at closing.
- Enterprise value of approximately $16 billion represents ~15x
fully synergized 2022 Black Knight adjusted EBITDA2.
- Expect to realize cost synergies of $200 million, with
one-third realized by year one, two-thirds by year three, and full
synergies realized by year five.
- Expect to realize revenue synergies, net of related costs, of
approximately $125 million by year five.
- Expected Black Knight transaction IRR of 10%
- Expect that the acquisition of Black Knight will be accretive
to adjusted EPS1 in the first full year post-close.
- Transaction expected to close in the first half of 2023,
subject to satisfaction of customary conditions including receipt
of Black Knight stockholder approval and Hart-Scott-Rodino (HSR)
review and clearance.
Goldman Sachs and Co., LLC and Wells Fargo Securities, LLC are
serving as lead financial advisors to Intercontinental Exchange,
and Shearman & Sterling LLP and Morgan Lewis & Bockius LLP
are serving as legal advisors to Intercontinental Exchange. J.P.
Morgan Securities LLC is serving as the exclusive financial advisor
to Black Knight and Wachtell, Lipton, Rosen & Katz is serving
as legal advisor to Black Knight.
1 Adjusted earnings per share (EPS)
excludes amortization of acquisition-related intangibles,
acquisition and integration expenses and the impact of equity
earnings from unconsolidated investees, net of tax.
2 2022 adjusted EBITDA represents the
midpoint of Black Knight’s FY22 adjusted EBITDA guidance range of
$786 million to $803 million, burdened for stock-based compensation
and adjusted for full synergies of $325 million.
Conference Call Information
ICE will review the details of the transaction alongside the
Company’s first quarter results on a previously scheduled
conference call on May 5, 2022, at 8:30 a.m. ET. A live audio
webcast of the conference call will be available on the company's
website at www.theice.com in the investor relations section.
Participants may also listen via telephone by dialing 844-512-2926
from the United States or 412-317-6300 from outside the United
States. Telephone participants are required to provide the
participant entry number 9429379 and are recommended to call 10
minutes prior to the start of the call. The call will be archived
on the company's website for replay.
About Intercontinental Exchange
Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500
company that designs, builds and operates digital networks to
connect people to opportunity. We provide financial technology and
data services across major asset classes that offer our customers
access to mission-critical workflow tools that increase
transparency and operational efficiencies. We operate exchanges,
including the New York Stock Exchange, and clearing houses that
help people invest, raise capital and manage risk across multiple
asset classes. Our comprehensive fixed income data services and
execution capabilities provide information, analytics and platforms
that help our customers capitalize on opportunities and operate
more efficiently. At ICE Mortgage Technology, we are transforming
and digitizing the U.S. residential mortgage process, from consumer
engagement through loan registration. Together, we transform,
streamline and automate industries to connect our customers to
opportunity.
Trademarks of ICE and/or its affiliates include Intercontinental
Exchange, ICE, ICE block design, NYSE and New York Stock Exchange.
Information regarding additional trademarks and intellectual
property rights of Intercontinental Exchange, Inc. and/or its
affiliates is located here. Key Information Documents for certain
products covered by the EU Packaged Retail and Insurance-based
Investment Products Regulation can be accessed on the relevant
exchange website under the heading “Key Information Documents
(KIDS).”
About Black Knight
Black Knight, Inc. (NYSE:BKI) is an award-winning software, data
and analytics company that drives innovation in the mortgage
lending and servicing and real estate industries, as well as the
capital and secondary markets. Businesses leverage our robust,
integrated solutions across the entire homeownership life cycle to
help retain existing customers, gain new customers, mitigate risk
and operate more effectively.
Our clients rely on our proven, comprehensive, scalable products
and our unwavering commitment to delivering superior client support
to achieve their strategic goals and better serve their customers.
For more information on Black Knight, please visit
www.blackknightinc.com.
Forward-Looking Statements
This communication contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Rule 175 promulgated thereunder, and Section 21E of
the Securities Exchange Act of 1934, as amended, and Rule 3b-6
promulgated thereunder, which involve inherent risks and
uncertainties. Any statements about Black Knight, Inc.’s (“BKI”) or
Intercontinental Exchange, Inc.’s (“ICE”) plans, objectives,
expectations, strategies, beliefs, or future performance or events
constitute forward-looking statements. Such statements are
identified as those that include words or phrases such as
“believes,” “expects,” “anticipates,” “plans,” “trend,”
“objective,” “continue,” or similar expressions or future or
conditional verbs such as “will,” “would,” “should,” “could,”
“might,” “may,” or similar expressions. Forward-looking statements
involve known and unknown risks, uncertainties, assumptions,
estimates, and other important factors that change over time and
could cause actual results to differ materially from any results,
performance, or events expressed or implied by such forward-looking
statements. Such forward-looking statements include but are not
limited to statements about the benefits of the proposed
acquisition of BKI by ICE (the “Transaction”), including future
financial and operating results, BKI’s or ICE’s plans, objectives,
expectations and intentions, the expected timing of completion of
the Transaction, the expected form and timing of debt financing to
fund the Transaction and other statements that are not historical
facts.
These forward-looking statements are subject to risks and
uncertainties that may cause actual results to differ materially
from those projected. In addition to factors previously disclosed
in BKI’s and ICE’s reports filed with the U.S. Securities and
Exchange Commission (the “SEC”) and those identified elsewhere in
this communication, the following factors, among others, could
cause actual results to differ materially from forward-looking
statements or historical performance: the occurrence of any event,
change, or other circumstance that could give rise to the right of
BKI or ICE to terminate the definitive merger agreement governing
the terms and conditions of the Transaction; the outcome of any
legal proceedings that may be instituted against BKI or ICE; the
possibility that the Transaction does not close when expected or at
all because required regulatory, stockholder, or other approvals
and other conditions to closing are not received or satisfied on a
timely basis or at all (and the risk that such approvals may result
in the imposition of conditions that could adversely affect BKI or
ICE or the expected benefits of the Transaction); the risk that the
benefits from the Transaction may not be fully realized or may take
longer to realize than expected, including as a result of changes
in, or problems arising from, general economic, political and
market conditions, interest and exchange rates, laws and
regulations and their enforcement, and the degree of competition in
the geographic and business areas in which BKI and ICE operate; the
ability to promptly and effectively integrate the businesses of BKI
with those of ICE; the possibility that the Transaction may be more
expensive to complete than anticipated, including as a result of
unexpected factors or events; reputational risk and potential
adverse reactions of BKI’s or ICE’s customers, employees or other
business partners, including those resulting from the announcement
or completion of the Transaction; the diversion of management’s
attention and time from ongoing business operations and
opportunities on merger-related matters; ICE’s ability to complete
the contemplated debt financing on a timely basis, on favorable
terms or at all; and the impact of the global COVID-19 pandemic on
BKI’s or ICE’s businesses, the ability to complete the Transaction
or any of the other foregoing risks.
These factors are not necessarily all of the factors that could
cause BKI’s or ICE’s actual results, performance, or achievements
to differ materially from those expressed in or implied by any of
the forward-looking statements. Other unknown or unpredictable
factors also could harm BKI’s or ICE’s results.
All forward-looking statements attributable to BKI or ICE, or
persons acting on BKI’s or ICE’s behalf, are expressly qualified in
their entirety by the cautionary statements set forth above.
Forward-looking statements speak only as of the date they are made
and BKI and ICE do not undertake or assume any obligation to update
publicly any of these statements to reflect actual results, new
information or future events, changes in assumptions, or changes in
other factors affecting forward-looking statements, except to the
extent required by applicable law. If BKI or ICE update one or more
forward-looking statements, no inference should be drawn that BKI
or ICE will make additional updates with respect to those or other
forward-looking statements. Further information regarding BKI, ICE
and factors which could affect the forward-looking statements
contained herein can be found in BKI’s Annual Report on Form 10-K
for the fiscal year ended December 31, 2021 and its other filings
with the SEC, and in ICE’s Annual Report on Form 10-K for the
fiscal year ended December 31, 2021 and its other filings with the
SEC.
Important Additional Information and Where to Find It
In connection with the Transaction, ICE will file with the SEC a
Registration Statement on Form S-4 to register the shares of ICE
common stock to be issued in connection with the Transaction. The
Registration Statement will include a proxy statement of BKI that
also constitutes a prospectus of ICE. The definitive proxy
statement/prospectus will be sent to the stockholders of BKI
seeking their approval of the Transaction and other related
matters.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE
REGISTRATION STATEMENT ON FORM S-4 AND THE PROXY
STATEMENT/PROSPECTUS INCLUDED WITHIN THE REGISTRATION STATEMENT ON
FORM S-4 WHEN THEY BECOME AVAILABLE, AS WELL AS ANY OTHER RELEVANT
DOCUMENTS FILED WITH THE SEC IN CONNECTION WITH THE TRANSACTION OR
INCORPORATED BY REFERENCE INTO THE PROXY STATEMENT/PROSPECTUS,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION REGARDING BKI, ICE,
THE TRANSACTION AND RELATED MATTERS.
Investors and security holders may obtain free copies of these
documents and other documents filed with the SEC by BKI or ICE
through the website maintained by the SEC at http://www.sec.gov or
from BKI at its website, www.blackknightinc.com, or from ICE at its
website, www.theice.com. Documents filed with the SEC by BKI will
be available free of charge by accessing BKI’s website at
www.blackknightinc.com under the tab “Investors” and then under the
heading “Financials – SEC Filings” or, alternatively, by directing
a request by mail or telephone to Black Knight, Inc., 601 Riverside
Avenue, Jacksonville, Florida 32204, Attention: Investor Relations,
(904) 854-5100, and documents filed with the SEC by ICE will be
available free of charge by accessing ICE’s website at www.ice.com
and following the link for “Investor Relations” or, alternatively,
by directing a request by mail or telephone to Intercontinental
Exchange, Inc., 5660 New Northside Drive, Third Floor, Atlanta,
Georgia 30328, Attention: Investor Relations, (770) 857-4700, or by
email to investors@ice.com.
Participants in the Solicitation
BKI, ICE, and certain of their respective directors and
executive officers may be deemed to be participants in the
solicitation of proxies from the stockholders of BKI in connection
with the Transaction under the rules of the SEC. Information about
the interests of the directors and executive officers of BKI and
ICE and other persons who may be deemed to be participants in the
solicitation of stockholders of BKI in connection with the
Transaction and a description of their direct and indirect
interests, by security holdings or otherwise, will be included in
the proxy statement/prospectus related to the Transaction, which
will be filed with the SEC. Additional information about BKI, the
directors and executive officers of BKI and their ownership of BKI
common stock is also set forth in the definitive proxy statement
for BKI’s 2022 Annual Meeting of Stockholders, as filed with the
SEC on Schedule 14A on April 28, 2022, and other documents
subsequently filed by BKI with the SEC. Additional information
about ICE, the directors and executive officers of ICE and their
ownership of ICE common stock can also be found in ICE’s definitive
proxy statement in connection with its 2022 Annual Meeting of
Stockholders, as filed with the SEC on March 25, 2022, and other
documents subsequently filed by ICE with the SEC. Free copies of
these documents may be obtained as described above.
No Offer of Solicitation
This communication is not intended to and shall not constitute
an offer to sell or the solicitation of an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote of approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offer of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
Non-GAAP Measures
This release includes non-GAAP measures that exclude certain
items we do not consider reflective of our cash operations and core
business performance. We believe that the presentation of these
non-GAAP measures provides investors with greater transparency and
supplemental data relating to our financial condition and results
of operations. These adjusted non-GAAP measures should be
considered in context with our GAAP results.
We present expected adjusted EBITDA for Black Knight for the
twelve months ended December 31, 2022, fully burdened for
stock-based compensation and adjusted for full synergies. Adjusted
EBITDA is not a measurement under GAAP in the United States and may
not be similar to EBITDA measures of other companies. We believe
that Adjusted EBITDA provides useful information to management and
investors as an indicator of the operating performance of these
businesses. We are not able to forecast the most directly
comparable measures calculated and presented in accordance with
GAAP. Certain elements of the composition of the GAAP amounts are
not predictable, making it impractical for us to forecast. As a
result, no GAAP outlook is provided.
Expected Adjusted EBITDA are only estimates and contain
forward-looking information. We and Black Knight have made a number
of assumptions in preparing these projections, which may or may not
prove to be correct. The expected Adjusted EBITDA amounts are
subject to various risks and uncertainties, and do not guarantee
actual results for the period indicated. Factors, risks and
uncertainties that could cause actual results to differ materially
from those projected include those in the documents that we file
with the SEC. We undertake no obligation to update or revise any of
the projections, whether as a result of new information, future
developments or otherwise.
Source: Intercontinental Exchange
ICE-CORP
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ICE Media Contacts
Josh King Josh.king@ice.com (212) 656-2490
Damon Leavell Damon.Leavell@ice.com (212) 323-8587
ICE Investor Contact
Mary Caroline O’Neal marycaroline.oneal@ice.com (770)
738-2151
Black Knight Media Contact:
Michelle Kersch michelle.kersch@bkfs.com (904) 854-5043
Black Knight Investor Contact:
Steve Eagerton steven.eagerton@bkfs.com (904) 527-4470
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