Intercontinental Exchange → Black Knight

The exchange operator's $13.1bn purchase of the mortgage-servicing software company, cleared only after a Federal Trade Commission settlement that required the sale of the Empower loan-origination system and the Optimal Blue pricing engine, cutting the final consideration to about $11.9bn.

Cleared only after an FTC settlement requiring divestiture of Empower and Optimal Blue, cutting final consideration to about $11.9bn.

Value

$13.1B

Announced

May 2022

Completed

September 2023

Sector

Fintech

Deal type

acquisition

Acquirer

Intercontinental Exchange (United States)

Target

Black Knight (United States)

Why it mattered

ICE, owner of the New York Stock Exchange, had spent five years assembling a US mortgage technology business — MERS in 2018, Simplifile in 2019, Ellie Mae for $11bn in 2020 — on the argument that a mortgage is a transaction that can be digitised end to end, and that the exchange model of owning the venue and charging for every step applies to it. Black Knight's MSP platform serviced roughly two-thirds of US first-lien mortgages, and buying it would have given ICE the origination, the servicing and the data.

The FTC's objection was that ICE's Encompass and Black Knight's Empower were the two leading origination systems, and that Optimal Blue's pricing engine was the one both used; the remedy sold both to Constellation Software, and the deal closed in September 2023 after sixteen months.

What it left behind

ICE as the largest technology supplier to US mortgage lending, and a clear statement of the current merger-control approach to fintech roll-ups: a series of acquisitions that each cleared can be stopped, or shrunk, at the one that completes the chain. The divestitures also created a stand-alone origination business at Constellation — a competitor the deal itself had to create.