Georgia-based online marketplaces operator Intercontinental Exchange, Inc. (NYSE: ICE) has signed an agreement to acquire software, data and analytics company Black Knight, Inc. (NYSE: BKI) for $13.1 billion.
Florida-based Black Knight provides software, data, and analytics solutions to the real estate and housing finance markets. It has a workforce of approximately 6,500 employees.
The CFO of Intercontinental Exchange, Warren Gardiner, said, “Black Knight’s high-growth, recurring revenue stream will further complement our ‘all weather’ business model, while the strength of ICE’s balance sheet, and our combined cash flows, position this transaction to be accretive to adjusted earnings per share in the first full year.”
The transaction is expected to close in the first half of 2023 and generate cost synergies of $200 million and revenue synergies of nearly $125 million over the next five years after the completion of the transaction.
About Intercontinental Exchange
Intercontinental Exchange designs, builds and operates regulated exchanges, clearinghouses, and listings venues for commodity, financial, fixed income, and equity markets in the U.S., the U.K., the EU, Singapore, Israel, and Canada.
Price Target
Based on 10 Buys and two Holds, the stock has a Strong Buy consensus rating. ICE’s average price target of $154.33 implies 40.5% upside potential from current levels. Shares have lost 18.8% over the past six months.
Conclusion
This deal is expected to strengthen ICE’s position in the mortgage technology segment. Further, it will help the company boost automation and efficiencies to lower the cost of obtaining a mortgage, thus improving the mortgage lending process for borrowers and lenders.
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