Why Black Knight Shares Are Surging Today

Intercontinental Exchange Inc ICE and Black Knight Inc BKI have agreed to sell Black Knight's Optimal Blue business to a subsidiary of Constellation Software Inc CNSWF for $700 million.

In May 2022, ICE announced the acquisition of Black Knight in a cash and stock transaction for $85 per share or a market value of $13.1 billion. 

The payment structure for Optimal Blue divesture includes a payment by Constellation of $200 million in cash, with the remainder financed by a $500 million promissory note issued by Constellation to Black Knight.

The divestiture agreement was entered in connection with efforts to secure regulatory clearance of ICE's proposed acquisition of Black Knight.

In March, FTC sued to block ICE's proposed acquisition of Black Knight, alleging the deal would drive up costs, reduce innovation, and reduce lenders' choices for tools necessary to generate and service mortgages.

Related: Intercontinental Exchange Says Disappointed On FTC's Attempt To Block Black Knight Deal

The divestiture transaction is subject to the closing of ICE's acquisition of Black Knight.

ICE and Black Knight previously announced an agreement to sell Black Knight's Empower loan origination system business to a subsidiary of Constellation Software in connection with efforts to secure merger clearance under the Hart-Scott Rodino Act.

Price Action: ICE shares are trading lower by 1.11% at $116.26 and BKI higher by 14.09% at $69.89 on the last check Monday.