8-KOther EventsExhibits & Filings

Intercontinental Exchange, Inc. 8-K Report, Corporate Update (Jul 17, 2023)

Filed July 17, 2023For Securities:ICE

Summary

Intercontinental Exchange (ICE) announced a significant development in its proposed acquisition of Black Knight, Inc. On July 13, 2023, ICE and Black Knight entered into an Equity Purchase Agreement to divest Black Knight's Optimal Blue (OB) business division to Project Badger Holdco Inc., a subsidiary of Constellation Software Inc., for $700 million. This divestiture is a strategic move to address antitrust concerns raised by the U.S. Federal Trade Commission (FTC) regarding the broader merger transaction. The $700 million consideration comprises $200 million in cash and a $500 million promissory note from the purchaser, bearing interest at 7% per annum and maturing in 40 years. The consummation of the OB divestiture is contingent upon several conditions, including the completion of ICE's merger with Black Knight and the prior divestiture of Black Knight's Empower loan origination system (LOS) business to another Constellation subsidiary. The FTC's approval of the OB divestiture, potentially through a consent order, or the resolution of regulatory waiting periods, is also a key condition. This filing signals progress in navigating regulatory hurdles, though the FTC lawsuits against ICE and Black Knight concerning the merger remain ongoing. Investors should monitor the resolution of these regulatory matters and the conditions precedent to both the divestiture and the ultimate merger.

Key Highlights

  • 1ICE and Black Knight entered into an Equity Purchase Agreement for the divestiture of Black Knight's Optimal Blue (OB) business division.
  • 2The OB divestiture is a condition to address antitrust concerns raised by the FTC regarding the proposed acquisition of Black Knight by ICE.
  • 3The sale price for the OB Divested Business is $700 million, consisting of $200 million in cash and a $500 million promissory note from the purchaser.
  • 4The $500 million promissory note will accrue interest at 7% per annum and has a 40-year maturity, with specific terms for interest and amortization payments.
  • 5Consummation of the OB divestiture is subject to the prior completion of the ICE-Black Knight merger and another divestiture of Black Knight's Empower LOS business.
  • 6FTC approval of the OB divestiture transaction, through a consent order or other regulatory clearance, is a critical closing condition.
  • 7The FTC lawsuits against ICE and Black Knight concerning the merger are still ongoing, despite this divestiture agreement.

Frequently Asked Questions

The OB Divestiture Agreement is designed to address antitrust concerns raised by the U.S. Federal Trade Commission (FTC) regarding Intercontinental Exchange's (ICE) proposed acquisition of Black Knight, Inc. By divesting Black Knight's Optimal Blue business division, ICE aims to satisfy regulatory requirements and facilitate the completion of the larger merger.

The total purchase price for the Optimal Blue business division is $700 million. This amount is comprised of $200 million in cash and a $500 million promissory note issued by the purchaser, Project Badger Holdco Inc. The note carries a 7% annual interest rate and has a long-term maturity of 40 years, with specific repayment and amortization schedules outlined.

Several conditions must be satisfied, including the prior completion of ICE's merger with Black Knight, and the successful divestiture of Black Knight's Empower loan origination system (LOS) business. Additionally, the FTC must approve the OB Divestiture Transaction, either through a consent order or other regulatory clearance, and regulatory waiting periods must expire or be terminated. There must also be an absence of any legal restraints prohibiting the transaction.

No, the filing states that the FTC lawsuits against ICE and Black Knight regarding the merger transactions remain ongoing. While the OB Divestiture Agreement is intended to address antitrust concerns, it does not automatically resolve the existing litigation. The FTC's approval of the divestiture through a consent order or other means is still a required condition for closing.