September 27, 2023

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ICE/Black Knight merger can go ahead as FTC approves settlement

2 min read

Intercontinental Alternate (ICE) obtained the inexperienced gentle to maneuver ahead with its acquisition of Black Knight after the Federal Commerce Fee (FTC) accepted a binding settlement.

Underneath the settlement, each corporations will divest Black Knight’s mortgage origination system (LOS) Empower enterprise and product and pricing engine (PPE) unit Optimum Blue to a subsidiary of Constellation Software program Inc, the FTC mentioned in a launch on Thursday. 

The fee voted 3-0 to just accept the consent order. The binding settlement comes after the FTC, ICE and Black Knight reached an settlement final week for the merger deal to shut on September 5. The consent settlement now goes by way of a public remark interval.

The proposed consent order settles FTC fees in March that ICE’s cope with Black Knight, which mixes the 2 prime mortgage know-how suppliers, would drive up prices, cut back innovation and restrict lenders’ selections for mortgage origination instruments.

“This deal as initially structured would have lowered competitors in key areas of the mortgage origination course of, elevating prices for lenders and homebuyers,” Henry Liu, director of the FTC’s bureau of competitors, mentioned in an announcement.

To handle these issues, the fee’s order supplies structural aid and instruments to protect competitors.

ICE and Black Knight are required to hunt approval from the FTC earlier than buying another companies associated to LOS or PPE for the following 10 years.

Each corporations are prohibited from implementing any non compete or non-solicit provision or settlement towards any worker who seeks or obtains a place within the divested companies.

Constellation would obtain a license to resell with Empower sure different Black Knight mortgage-related services that will be acquired by ICE.  A monitor can be appointed to supervise compliance with the proposed consent order.

ICE’s deliberate acquisition of Black Knight went by way of a bumpy highway after the announcement was made in Might 2022. 

Along with each corporations’ resolution to promote Empower and Optimum Blue to handle antitrust issues, ICE and Black Knight amended their deal phrases to cut back the valuation of Black Knight to $11.8 billion from $13 billion.

In April, the FTC filed swimsuit within the U.S. District Courtroom for the Northern District of California to stop ICE from consummating the Black Knight transaction pending the end result of the Fee’s administrative problem.

ICE’s acquisition of Black Knight can be the second large mortgage tech deal for ICE, which acquired Ellie Mae from Thoma Bravo for $11 billion in 2020.

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