Announcement • Sep 06
Intercontinental Exchange, Inc. (NYSE:ICE) competed the acquisition of Black Knight, Inc. (NYSE:BKI).
Intercontinental Exchange, Inc. (NYSE:ICE) entered into a definitive agreement to acquire Black Knight, Inc. (NYSE:BKI) for $13.2 billion on May 4, 2022. As per the terms of the transaction, Intercontinental Exchange shall pay in a cash and stock transaction at the election of Black Knight's shareholders. The cash consideration is $10.5 billion. The per share cash consideration shall mean the sum, $68 plus the product of 0.144 and average Intercontinental Exchange's Stock Price. The per stock consideration shall mean per share cash consideration divided by average Intercontinental Exchange's stock price. As of March 7, 2023, the amended merger agreement terms value Black Knight at $75 per share, or a market value of $11.8 billion, with consideration in the form of a mix of approximately $68 per share in cash and stock with an exchange ratio of 0.0682. As under the original terms, Black Knight shareholders can elect to receive either cash or stock, subject to proration, with the value of the cash election and the stock election equalized at the closing of the acquisition. ICE will use the net proceeds from the offering of the 2025 notes of $1.25 billion, the 2027 notes of $1.5 billion, the 2029 notes of $1.25 billion and the 2062 notes of $1 billion (collectively, the “SMR notes”), together with the issuance of commercial paper under the Commercial Paper Program and/or borrowings under the Revolving Credit Agreement, cash on hand or other immediately available funds and borrowings under a new senior unsecured term loan facility, to finance the cash portion of the purchase price. In event of termination, Black Knight will pay $398 million and Intercontinental Exchange will pay $725 million.
The transaction is subject to satisfaction of customary conditions including receipt of Black Knight stockholder approval, regulatory approvals and Hart-Scott-Rodino (HSR) review and clearance, registration statement effectiveness and listing of new shares and other conditions. The deal has been unanimously approved by the Boards of Directors of both Black Knight and Intercontinental Exchange. As of March 7, 2023, ICE and Black Knight entered into the divestiture agreement in connection with efforts to secure clearance of ICE’s proposed acquisition of Black Knight under the Hart-Scott Rodino Act. On March 9, 2023, the U.S. Federal Trade Commission filed an administrative complaint challenging the proposed acquisition of Black Knight by ICE. ICE and Black Knight strongly disagree with, and intend to vigorously oppose, the FTC’s decision to challenge the proposed acquisition. FTC has filed litigation to prevent ICE from closing the transaction. As of April 10, 2023, the staff of the Federal Trade Commission asked a federal court to issue a temporary restraining order and preliminary injunction to prevent ICE from consummating its proposed acquisition of Black Knight, Inc., pending the outcome the FTC’s administrative challenge to the deal. The transaction expected to close in the first half of 2023. On July 14, 2023, at the request of ICE, Black Knight entered into an Equity Purchase Agreement with a subsidiary of Constellation Software Inc. Black Knight and ICE are executing the OB Divestiture Agreement in order to address certain alleged antitrust concerns raised by the U.S. Federal Trade Commission (“ FTC ”) in its lawsuits against Black Knight and ICE regarding the Merger Transactions, which remain ongoing. Under terms of the divestiture agreement, Constellation will acquire Black Knight’s Optimal Blue business for $700 million. As of August 7, 2023, Intercontinental Exchange, Black Knight and Federal Trade Commission jointly agree to dismiss previous restraining order and preliminary injunction allowing ICE, Black Knight and the FTC to continue working toward a final settlement agreement resolving the FTC’s administrative challenge to the deal. As of August 31, 2023, The Federal Trade Commission approved a proposed consent order to resolve antitrust concerns surrounding Intercontinental Exchange, Inc. acquisition of Black Knight, Inc. As of March 31, 2023, the transaction is expected to close in third or fourth quarter of 2023. As of August 25, 2023, the transaction is expected to close on September 5, 2023 and the deadline for Black Knight stockholders to elect their preferred form of merger consideration is September 1, 2023. The transaction will be accretive to adjusted EPS 1 in the first full year post-close of Black Knight.
Goldman Sachs and Co., LLC and Wells Fargo Securities, LLC are serving as lead financial advisors to Intercontinental Exchange, and Rory B. O’Halloran and Cody L. Wright of Shearman & Sterling LLP and Morgan Lewis & Bockius LLP are serving as legal advisors to Intercontinental Exchange. J.P. Morgan Securities LLC is serving as the exclusive financial advisor and fairness opinion provider to Black Knight and Edward D. Herlihy and Jacob A. Kling of Wachtell, Lipton, Rosen & Katz is serving as legal advisors to Black Knight. Credit Suisse Securities (USA) LLC acted as a financial advisor to Intercontinental Exchange, Inc. Catherine M. Clarkin of Sullivan & Cromwell LLP acted as legal advisor in the transaction. Continental Stock Transfer & Trust Company acted as transfer agent to Black Knight, Inc. Computershare Investor Services LLC acted as transfer agent to Intercontinental Exchange, Inc. Innisfree M&A Inc. acted as the information agent to Black Knight, Inc. For financial advisory services rendered in connection with the merger, Black Knight has agreed to pay J.P. Morgan an estimated fee of $70 million, $3 million of which became payable to J.P. Morgan at the time J.P. Morgan delivered its opinion and the remainder of which is contingent and payable upon the consummation of the merger. Black Knight will pay Innisfree M&A Incorporated, for a fee of $0.03 million for proxy solicitation. Georgeson LLC is the information agent for Black Knight.
Intercontinental Exchange, Inc. (NYSE:ICE) competed the acquisition of Black Knight, Inc. (NYSE:BKI) on September 5, 2023. Black Knight will continue as the surviving corporation and as a wholly owned subsidiary of ICE.
