No one can predict the future of real estate, but you can prepare.Find out what you need to prepare and get the tools you need with Immersive Virtual Inman Connect It will be held from November 1st to 2nd, 2023.Do not miss it inman connect new york Held from January 23-25, 2024, AI, capital, and more will take center stage. Bet big on the exciting future and join Connect.
Intercontinental Exchange Inc. on Friday upheld previous commitments it made to antitrust regulators, namely the sale of Black Knight’s Optimal Blue and Empower businesses to a subsidiary of Toronto-based Constellation Software Inc. By fulfilling our promise to do so, we have completed our efforts to acquire rival company Black Knight.
Upon completion of the transaction, Empower and Optimal Blue will operate within Constellation Software’s Perseus Group, which announced that it has rebranded Black Knight Origination Technologies LLC to Dark Matter Technologies.Dark Matter will remain based in Jacksonville, Florida, and will be led by a 12-year Black Knight veteran. Rich Gagliano I am the CEO of the company.
Rich Gagliano
“We understand that our existing long-term customer relationships extend far beyond innovative technology,” Gagliano said in a statement. statementpromised that Dark Matter’s leadership team and more than 1,300 employees are “focused on smooth and trouble-free transition plans for our clients.”
As part of the Empower deal, Constellation Software also acquired AIVA, Black Knight’s virtual AI assistant. LendingSpace, the corresponding lending system. and the Exchange network of service providers for lenders and servicers.
a Listed company Constellation Software has a market capitalization of USD 44.7 billion (CAD 60.5 billion). company portfolio We serve a wide range of industries including real estate, financial services, mining, hospitality, and healthcare.
other Affiliated companies Constellation Software’s Perseus Group includes market leaders in lead generation and contact management systems, real estate technology providers Constellation1, SmartZip, Top Producer, and Sharper Agent. Last year, another Constellation subsidiary, Constellation Mortgage Solutions, introduced its NOVA loan origination solution, touting it as the new “gold standard in mortgage origination technology.”
Constellation Mortgage Solutions Romulus Groupa portfolio of vertical market software companies within Constellation Software’s Perseus group.
tom george
“With our two recent acquisitions, we have built an impressive portfolio of independently owned companies and products in the mortgage software space, including Empower LOS, Optimal Blue, NOVA LOS, Reverse Vision and Axacore,” said Romulus Group Co-President. says Tom George of ,in statement. “We are excited to work with all groups to invest and grow through organic and add-on acquisitions.”
Intercontinental Exchange (ICE) said little about the closing on Friday. other than that “The sale of the Black Knight assets helped secure regulatory clearance from the U.S. Federal Trade Commission for the Black Knight acquisition by ICE.”
ICE, Completed $11.9 billion acquisition Black Knight announced on September 5 that it will hold a conference call with investors on September 28 to “discuss future plans for ICE Mortgage Technology,” the company’s end-to-end mortgage service. did.
ICE gains access to mortgage servicer, MLS
In an exclusive interview with forbes After the merger closes, ICE Chairman and CEO Jeff Sprecher said the deal builds on ICE’s acquisitions of Ellie Mae in 2020 and SimpliFile and Mortgage Electronic Registration Systems in 2019. (Mels) laid the foundation for ICE Mortgage Technology in 2018.
ICE was forced to sell Black Knight’s Empower and Optimal Blue businesses; held the solution Black Knight serves mortgage servicers and multiple listing services (MLS), which opens up new opportunities for ICE, Sprecher said.
Jeff Sprecher
“Ellie Mae handles 50 percent of all originations, MERS handles 85 percent to 90 percent of registrations, and Black Knight has 65 percent of the service market,” Sprecher told Forbes. With the deal with Black Knight, “we will now service almost every mortgage loan in some way.”
Sprecher said forbes He described ICE as an intermediary that provides information from multiple sources to lenders and borrowers, helping borrowers understand what assets they have in their homes and what loans they may be eligible for. He said that he believed that. The lender, or the person who funded the loan, “regardless of who the servicer is or who the original servicer is.” ”
Since announcing last year that it had reached an agreement to acquire Black Knight, ICE has argued that lenders and consumers will benefit from expected efficiencies that will reduce the cost and time required to originate and close mortgage loans. .
Concessions to antitrust regulators
ICE was already the largest provider of mortgage origination systems when it moved to acquire Black Knight in May 2022, thanks to its $11.4 billion acquisition of Ellie Mae’s Encompass product.
When the FTC moved to block Black Knight’s transactions in March, the regulator said that if ICE were allowed to take control of Black Knight’s Empower Loan Origination System, “ICE could “This will allow us to more aggressively raise the prices we charge loan lenders.”
The Community Mortgage Lenders Association, a trade group representing small and medium-sized community-based mortgage lenders, also sent a lengthy letter to Attorney General Merrick Garland outlining concerns, saying the merger would “have a negative impact on consumers looking to buy. “This will have serious negative consequences,” he warned. The cost of essential software and related services is typically passed directly to consumers, leading to housing and refinancing. ”
ICE’s original solution of selling Empower to Constellation Software was not sufficient to satisfy the FTC, and the FTC noted that Constellation will continue to use ancillary products provided by ICE, such as Black Knight’s Optimal Blue mortgage product and pricing engine. It noted that it would act as a reseller of services (PPE), helping lenders make offers to borrowers.
ICE and Black Knight then agreed to sell Black Knight’s Optimal Blue business as well, and provided Constellation with a $500 million loan to help close the deal. $700 million deal.
In agreeing to greenlight the merger on August 31, antitrust regulators extracted a number of concessions from ICE and Black Knight. In addition to the sale of Empower and Optimal Blue, the companies also require that ICE seek FTC approval before acquiring an interest in another loan origination system, such as Empower, and an interest in another PPE business, such as Optimal Blue. We have agreed to provide notice before doing so.
of consent order The companies’ agreement with the FTC also grants Constellation a license to resell “certain other Black Knight mortgage-related products and services that ICE may acquire” along with Empower.
“The deal with Constellation Software will keep Optimal Blue and the Empower loan origination system under a single, highly trusted owner,” Sprecher said in a statement with investment analysts. This was stated at the financial results conference held on March 3rd. “The relevant agreement continues and expands our commercial relationship, making Optimal Blue fully available to his ICE customers on our open network.”
Despite having to sell Optimal Blue and Empower, Sprecher said the deal with Black Knight would allow ICE to generate $125 million in “revenue synergies” and $200 million within five years. He said he continued to expect “expenditure synergies” to be generated.
“As Optimal Blue’s largest distributor across our network, we believe the combined ICE and Black Knight entity will bring value to end consumers as well as other stakeholders across the mortgage ecosystem. We continue to be very excited about efficiency,” Sprecher told investors. Analyst.
Originally founded as an energy market 20 years ago, ICE generates most of its revenue as the operator of 12 regulated exchanges around the world, including the New York Stock Exchange.
in the press 2nd quarter results ICE said last month that its mortgage technology business, which accounted for 13% of the company’s $3.78 billion in revenue in the first half of this year, was unprofitable and had an operating loss of $45 million.
Get Inman’s Mortgage Overview Newsletter delivered straight to your inbox. Get the world’s biggest mortgage and closing news all in one place every Wednesday. Click here to subscribe.
Email Matt Carter
