One of the most watched sagas in the mortgage lending sphere will finally reach its end in a little over a week, when the acquisition of Black Knight by Intercontinental Exchange (ICE) is expected to close, according to a joint statement from the companies.
The two industry giants announced that, after entering into an agreement containing consent orders (ACCO) with the Federal Trade Commission (FTC), the acquisition is now expected to close on Sept. 5. The ACCO, a document between ICE, Black Knight and the FTC that outlines mutually acceptable conditions for the transaction, was essentially the last step to full and final FTC approval of the merger.
Early in August, the FTC agreed to withdraw its challenge to the controversial union after Black Knight divested two key divisions, Empower and Optimal Blue, to ease antitrust concerns. At that time, it was announced that the deadline for an ACCO to be reached was Aug. 25; ICE and Black Knight publicized the ACCO on the evening of the deadline date.
The FTC originally chose to intervene in the $13.1 billion transaction in March, saying that the merger could “drive up costs, reduce innovation and reduce lenders’ choices for tools necessary to generate and service mortgages.” This was after ICE and Black Knight had already agreed to sell Empower (the widely used loan origination software suite) to Canadian-based Constellation Software, but the FTC remained unconvinced. The July sale of the Optimal Blue mortgage eligibility and pricing platform, also to Constellation Software, helped to further grease the wheels for FTC approval.
The divestitures reduced the price tag of the Black Knight acquisition to roughly $11.7 billion. ICE and Black Knight announced that the Empower and Optimal Blue divestitures are now expected to be completed within 20 days of the closing of the merger. They also announced a Sept. 1 deadline for Black Knight stockholders to choose the form of merger consideration (cash or ICE common stock) they wish to receive.
