© Reuters. FILE PHOTO: A screen displays the Intercontinental Exchange Inc. (ICE) ticker symbol and logo on the floor of the New York Stock Exchange (NYSE) March 1, 2016. REUTERS/Brendan McDermid
By Niket Nishant
(Reuters) – New York Stock Exchange owner Intercontinental Exchange Inc (NYSE:) and Black Knight (NYSE:) Inc agreed on Tuesday to sell one of the mortgage data provider’s units to calm antitrust concerns, but said they would take the battle to court to save the deal, if necessary.
Black Knight’s Empower loan origination system unit, which helps mortgage lenders manage costs and reduce loan application processing time, will be sold to a unit of Canada’s Constellation Software Inc, the two said. companies.
Black Knight’s shares rose 3.6%, while the stock trader’s fell 0.2%.
The companies also amended the terms of their deal to lower Black Knight’s valuation to $11.7 billion, nearly 11% below the valuation it had obtained when the deal was announced last year.
The deal has come under scrutiny by the Federal Trade Commission amid concerns from some US lawmakers that the pricing power ICE would gain in the mortgage data market could lead to higher costs for consumers.
“ICE has committed, among other things, to litigating with the FTC, if necessary, to get the merger approved,” he said.
US antitrust regulators have taken a tough stance against corporate consolidation, waging battles against companies in every industry, including airlines, technology and finance.
“ICE’s commitment to litigation combined with the successful sale of Empower to a strategic buyer of scale increases the likelihood of the merger closing, which more than makes up for the lower merger consideration,” KBW analysts wrote in a statement. note.
The sale won’t be enough to assuage the FTC’s concerns, but the quick sale to a big strategic buyer like Constellation Software should bolster the companies’ defense in a potential lawsuit, analysts said.
Last month, Reuters had reported that the companies were planning to divest Empower.
