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Intercontinental Exchange, Inc. 8-K Report, Material Agreement (Aug 7, 2020)

Filed August 7, 2020For Securities:ICE

Summary

Intercontinental Exchange, Inc. (ICE) announced a significant definitive agreement to acquire Ellie Mae, a leading cloud-based loan origination software provider, for a total transaction value of $11 billion. The acquisition will be financed through a combination of $9.25 billion in cash and approximately $1.75 billion in ICE common stock. This strategic move is poised to significantly expand ICE's mortgage technology capabilities, integrating Ellie Mae's platform to create a comprehensive end-to-end solution for the U.S. residential mortgage industry. The closing of the acquisition is subject to customary conditions, including regulatory approvals such as the Hart-Scott-Rodino Act, and is not subject to a financing condition. ICE has secured a $10.65 billion senior unsecured bridge facility as backup financing, alongside plans for permanent debt financing through commercial paper, existing credit agreements, and new debt securities. The transaction is expected to close no earlier than September 21, 2020, and no later than February 6, 2021, with potential extension to August 6, 2021, if antitrust approvals are pending.

Key Highlights

  • 1ICE has entered into a definitive agreement to acquire Ellie Mae for a total consideration of $11 billion.
  • 2The acquisition will be funded by $9.25 billion in cash and approximately $1.75 billion in ICE common stock.
  • 3This transaction significantly expands ICE's presence and capabilities in the mortgage technology sector.
  • 4Closing conditions include customary regulatory approvals, such as HSR Act clearance.
  • 5The acquisition is not subject to a financing condition for ICE.
  • 6ICE has arranged a $10.65 billion bridge loan facility as backup financing for the cash portion.
  • 7The transaction is expected to close on or after September 21, 2020, with a long-stop date of February 6, 2021 (extendable to August 6, 2021).

Frequently Asked Questions

The acquisition of Ellie Mae is intended to significantly expand ICE's capabilities in the mortgage technology space, creating a comprehensive, end-to-end solution for the U.S. residential mortgage industry by integrating Ellie Mae's leading cloud-based loan origination software.

ICE plans to finance the acquisition with $9.25 billion in cash, which will be funded through a combination of commercial paper, existing credit facilities, new debt securities, and potentially a senior unsecured term loan facility. Additionally, approximately $1.75 billion will be paid in newly issued ICE common stock.

The closing of the acquisition is subject to customary conditions, including the accuracy of representations and warranties, performance of obligations, absence of governmental orders prohibiting the transaction, and the expiration of the waiting period or receipt of approvals under the Hart-Scott-Rodino Improvements Act. A financing condition is not a requirement for closing.

The acquisition is expected to close on or after September 21, 2020. The parties have set a termination date of February 6, 2021, which can be extended to August 6, 2021, if necessary to obtain antitrust approvals.