In an ongoing effort to appease regulators to approve their proposed merger, Intercontinental Exchange (ICE) and Black Knight have agreed to sell Optimal Blue.
The two companies are selling the Black Knight subsidiary to Toronto-based Constellation Software Inc., according to a statement from ICE. Under the terms of the deal, Constellation will pay $200 million in cash for Optimal Blue and will issue a $500 promissory note at the closing of the transaction, bringing the full price of the sale to $700 million.
The agreement to divest Optimal Blue, which provides data and software services for the real estate and mortgage industries, is the latest move in the attempt to secure regulatory clearance for ICE’s acquisition of Black Knight. That union was originally announced in May 2022 and was slated to close in the first half of 2023 but has run into several hurdles since. Some trade organizations and watchdog groups have voiced their opposition to the transaction, arguing that the market domination gained by ICE via the merger would give too pricing power to one company and could lead to higher costs for lenders and consumers.
The divestiture of Optimal Blue is a conditional sale, subject to the closing of ICE’s acquisition of Black Knight. It’s the second proposed divestiture of a Black Knight asset to Constellation, which also agreed to purchase Black Knight’s widely used Empower loan origination system software platform in March.
That sale was publicized following the release of a Politico story, which claimed the Federal Trade Commission (FTC) would move to block the ICE-Black Knight merger later in the month. Indeed, despite the sale of Empower in an effort to clear regulatory barriers, the FTC swiftly announced that it would challenge the merger in a unanimous 4-0 vote. That challenge is still in progress, and it remains to be seen whether the newest sale will be enough to get the FTC to approve the transaction.