Intercontinental Exchange to acquire Black Knight in $13.1B cash-and-stock deal

Intercontinental Exchange Inc. entered into a definitive agreement to acquire Black Knight Inc. in a cash-and-stock transaction.

The deal values Black Knight at $85 per share, or a total market value of $13.1 billion, with consideration in the form of a mix of 80% cash and 20% stock. The cash consideration of $10.5 billion is expected to be funded with newly issued debt and cash on hand at the time of the transaction's closing. The stock consideration is valued at approximately $2.6 billion based on Intercontinental Exchange's 10-day volume-weighted average price as of May 2 of $118.09.

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 closing.

The transaction is expected to close in the first half of 2023.

Intercontinental Exchange anticipates the acquisition will be accretive to adjusted EPS in the first full year post-close. The company expects to realize cost synergies of $200 million, with one-third realized by year one, two-thirds by year three and full synergies realized by year five. It also expects to realize revenue synergies, net of related costs, of about $125 million by year five. The anticipated transaction internal rate of return is 10%.

Goldman Sachs and Co. LLC and Wells Fargo Securities LLC are lead financial advisers to Intercontinental Exchange, while Shearman & Sterling LLP and Morgan Lewis & Bockius LLP are legal advisers to the company. J.P. Morgan Securities LLC is the exclusive financial adviser, and Wachtell Lipton Rosen & Katz is legal adviser to Black Knight.