Intercontinental Exchange agrees to buy Black Knight for $13B

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Intercontinental Exchange (NYSE:ICE) agreed to buy mortgage-lending software and analytics firm Black Knight (NYSE:BKI) for about $13.1 billion. Black Knight jumped 18%, while ICE fell 7.6%.

The deal is valued at $85/share and consists of a mix of 80% cash and 20% stock, according to a statement. The transaction is expected to close in the first half of next year following various approvals.

The news comes after Bloomberg reported earlier that ICE was weighing a potential deal for Black Knight (BKI) after the news service last month said BKI was considering a potential sale after garnering takeover interest.

Cash consider of $10.5 billion is 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 of $118.09.

Black Knight (BKI) holders will be able to elect either to receive cash or stock. ICE expects the acquisition of BKI will be accretive to adjusted EPS in the first full year post close.

ICE expects to see cost synergies of $200 million and sees revenue synergies, net of related costs, of about $125M by year five.

Goldman Sachs and Wells Fargo are serving as lead financial advisors to ICE and Shearman & Sterling LLP and Morgan Lewis & Bockius LLP are serving as legal advisors. J.P. Morgan Securities is serving as the exclusive financial advisor to BKI and Wachtell, Lipton, Rosen & Katz is serving as legal advisor.

Last month Truist analyst Andrew Jeffrey said Black Knight Inc. (BKI) may be valued at $80-$85/share in a takeout.

Recall that ICE (ICE) agreed to buy Ellie Mae from Thoma Bravo in 2020 for about $11 billion.