Intercontinental Exchange closes acquisition of Black Knight
Intercontinental Exchange, Inc. (NYSE:ICE) and Black Knight, Inc. (NYSE:BKI) today announced that ICE has completed its acquisition of Black Knight.
The Black Knight acquisition follows ICE’s 2020 acquisition of Ellie Mae, its 2019 acquisition of Simplifile, and its 2018 acquisition of Mortgage Electronic Registrations Systems (MERS), which together created the foundation of its ICE Mortgage Technology business segment. ICE Mortgage Technology combines data and expertise to help automate the mortgage process, from consumer engagement through loan registration, and every step in between.
As previously announced, subject to the proration procedures specified in the Agreement and Plan of Merger entered into by ICE and Black Knight on May 4, 2022 and amended on March 7, 2023, Black Knight stockholders were entitled to elect to receive, in exchange for each issued and outstanding share of Black Knight common stock they owned:
- an amount in cash (the “Per Share Cash Consideration”) equal to the sum, rounded to the nearest one tenth of a cent, of (x) $68.00 plus (y) the product, rounded to the nearest one tenth of a cent, of 0.0682 multiplied by the average of the volume weighted averages of the trading prices of ICE common stock on the New York Stock Exchange on each of the ten consecutive trading days ended on (and including) the trading day that was three trading days prior to the date on which the effective time of the acquisition occurred (the “Closing 10-Day Average ICE VWAP”); or
- a number of validly issued, fully paid and nonassessable shares of ICE common stock (the “Per Share Stock Consideration”) as is equal to the quotient, rounded to the nearest one ten thousandth, of (x) the Per Share Cash Consideration divided by (y) the Closing 10-Day Average ICE VWAP.
Based on the Closing 10-Day Average ICE VWAP for the ten consecutive trading days ended on (and including) August 30, 2023, which was $115.355, the Per Share Cash Consideration is $75.867, the Per Share Stock Consideration is 0.6577 shares of ICE common stock, and the aggregate value of the consideration to be received by Black Knight stockholders (including rollover equity awards) is approximately $11.9 billion.
The Merger Agreement provides that the aggregate amount of cash consideration will equal $10,505,000,000. The total number of shares of Black Knight common stock that will convert into the right to receive the Per Share Cash Consideration will equal the quotient, rounded down to the nearest whole share, of (i) the Cash Component divided by (ii) the Per Share Cash Consideration. All the remaining shares of Black Knight common stock not receiving the Per Share Cash Consideration will be converted into the right to receive the Per Share Stock Consideration.
The deadline for Black Knight stockholders to have made an election as to the form of consideration they wished to receive in connection with the acquisition was 5:00 p.m., Eastern Time, on September 1, 2023.
Based on the preliminary results, the Per Share Stock Consideration is oversubscribed, Black Knight stockholders who elected to receive the Per Share Stock Consideration will be subject to proration and their shares are expected to be converted into the right to receive approximately 68% of the merger consideration payable to them in cash and approximately 32% in the form of ICE common stock. Black Knight stockholders who made valid elections to receive the Per Share Cash Consideration and any shares with respect to which an election was not made prior to the election deadline will be converted into the right to receive the Per Share Cash Consideration.
After the final election results are determined, the final allocation and proration of merger consideration to Black Knight stockholders who elected to receive Per Share Stock Consideration will be calculated in accordance with the procedures specified in the Merger Agreement.
In connection with efforts to secure regulatory clearance from the Federal Trade Commission for ICE’s acquisition of Black Knight, ICE has agreed to divest Black Knight’s Optimal Blue and Empower loan origination system (LOS) businesses to subsidiaries of Constellation Software Inc. (TSX: CSU). The divestitures are expected to be completed within the next 20 days.