MReport May 2022

TheMReport — News and strategies for the evolving mortgage marketplace.

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M R EP O RT | 5 MTECH ICE to Acquire Black Knight in $13.1B Deal ICE ADDS BLACK KNIGHT'S INTEGRATED SOLUTIONS TO FURTHER DIGITIZE ITS VITAL NETWORKS, ENHANCING ITS MORTGAGE MANUFACTURING AND SERVICING ECOSYSTEM. I ntercontinental Exchange Inc. (ICE) has entered into a definitive agreement to acquire Black Knight Inc. in a cash and stock transaction at a market value of $13.1 billion. The transac- tion, valued at $85 per share, or a total market value of $13.1 billion, with consideration in the form of a mix of cash (80%) and stock (20%). Cash consideration of $10.5 billion is expected to be funded with newly issued debt and cash on hand at the time of the close of the transaction. Based in Jacksonville, Florida, Black Knight employs approxi- mately 6,500, and is a provider of an integrated ecosystem of software, data, and analytics solu- tions serving the real estate and housing finance markets. "Since our founding in 2000, ICE's simple mission has been to make analog and opaque finan- cial transactions more digital and transparent, beginning with com- modity markets, extending across a large array of asset classes, and most recently working to help streamline the mortgage industry," said Jeffrey C. Sprecher, Founder, Chair and CEO of ICE. "Black Knight shares our passion for leveraging technology to serve customers and households, and, with our expertise in operating networks and marketplaces, our planned acquisition will bring to life a true end-to-end solution for the mortgage manufacturing and servicing ecosystem, benefitting aspiring and current homeowners across the United States." According to MarketWatch, news of the merger drove the price of Black Knight shares up 18% to $75.17, as ICE agreed to buy the firm for $85 per share. The addition of Black Knight's tech solutions strengthens ICE's growing mortgage technology business by increasing automation, while harnessing data that can help current homeowners lower their monthly payments, and lessen the likelihood of default. "Black Knight has been on a successful journey to transform the mortgage industry by provid- ing our clients with powerful, interconnected solutions that help them achieve greater efficiency and better serve their custom- ers," said Anthony M. Jabbour, Chairman and CEO of Black Knight. "We believe this combi- nation is the right next step in that journey. Black Knight and ICE share a common vision and commitment to deliver a better experience for our clients and the stakeholders we serve, and to ultimately streamline the home- ownership process. By combin- ing our expertise, we can deliver significant benefits to our clients and consumers by improving and streamlining the process of find- ing a home, as well as obtaining and managing a mortgage." The transaction is expected to close in the first half of 2023, following the receipt of regulatory approvals, Black Knight stockhold- er approval, and the satisfaction of customary closing conditions. "This transaction will benefit ICE, Black Knight, and our col- lective shareholders," said Warren Gardiner, CFO of Intercontinental Exchange. "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." According to Yahoo, ICE purchased cloud-based platform Ellie Mae for $11 billion in August 2020, following a $335 million deal for Simplifile in 2019, and the ac- quisition of MERS, in which ICE took a majority stake in 2016 and purchased outright in 2018. Forward-Planning MORTGAGE COACH AND REVERSEVISION COLLABORATE ON MORTGAGE COMPARISON TOOL. M ortgage Coach has an- nounced an integration with ReverseVision, a subsidiary of Constellation Mort- gage Solutions, to enable lenders to produce a Reverse Total Cost Analysis (TCA). A TCA is an in- teractive presentation that allows loan originators to provide con- sumers side-by-side comparisons of how reverse mortgages perform against forward mortgages over the lifetime of the loan. According to the National Reverse Mortgage Lenders Association (NRMLA), consumers aged 62 and above comprise a significant share of the mortgage market, holding $10.1 trillion in home equity. "For the first time ever, the Reverse TCA is making it possible for tens of thousands of expert for- ward mortgage advisors to easily, accurately, and compliantly com- pare forward and reverse mortgage options side-by-side," Mortgage Coach President Joe Puthur said. "The solution strengthens lender relationships with qualified clients by modeling home financing options designed for their stage in life, while helping loan officers advise clients on the mortgage solution that is right for them." Mortgage Coach's Reverse TCA will enable loan originators to better serve their clients by helping them evaluate whether a forward or reverse mortgage is best suited to meet their homeownership and financial goals. Designed to educate consumers about the conditions of reverse mortgages and illustrate their unique features. Consumers will have the ability to share Reverse TCA presentations with financial advisors and family mem- bers via text and email, keeping all in the process fully-informed. "This new partnership with Mortgage Coach opens doors for forward mortgage lenders to drive new undiscovered loan revenue and profitability by leveraging the surging home equity market via HECM mortgages," said Stephen Ryczek, President of Constellation Mortgage Solutions. "Lenders can provide an equity loan that provides seniors with a more comfortable retirement without the financial stress of monthly loan repayment." Steps Toward an All- Digital Transaction From blockchain transactions to AI-aided verification tools, these forward-thinking firms are at the forefront of the digital mortgage revolution.

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