Black Knight to acquire Optimal Blue from GTCR for $1.8 bn

By Pavithra R

Black Knight, a provider of integrated technology and services across the mortgage and real estate continuum, has announced that the company has entered into a definitive equity purchase agreement with affiliates of private equity firm GTCR, to purchase Optimal Blue, a leading provider of secondary market solutions and actionable data services.

Founded in 2002, Optimal Blue operates the mortgage industry’s digital marketplace which connects lenders, investors, and providers with comprehensive secondary marketing solutions, market-leading capabilities and value-added services that deliver results.

“Optimal Blue is a business that we have respected for many years. By bringing Optimal Blue into the Black Knight family, we will be adding industry-leading product, pricing and eligibility (PPE) capabilities to our already robust set of solutions and enhancing our already comprehensive data and analytics capabilities. In addition to Optimal Blue’s high-quality and passionate management team, we are pleased and honored to be partnering with two experienced and successful investors in Cannae and THL, both of which we have known and respected for a long time and are confident will provide meaningful value-add,” said Anthony Jabbour, CEO of Black Knight.

Black Knight has agreed to acquire Optimal Blue for an enterprise value of $1.8 billion, subject to customary purchase price adjustments. Through the acquisition, Black Knight is planning to combine its Compass Analytics business with Optimal Blue in a newly formed entity with minority co-investors Thomas H. Lee Partners and Cannae Holdings. Black Knight will own approximately 60% of the new entity.

“Optimal Blue and Black Knight share similar strategies for innovation, integration and client focus, as well as a similar culture, which is key to successfully integrating premier companies. We are excited about the opportunity to be part of Black Knight where there is such a great strategic fit, strong client base and so many opportunities to deliver innovative solutions that will add value to our clients,” said Scott Happ, CEO of Optimal Blue.

“We also share similar business models, which include subscription-based recurring revenues and significant operating leverage. We believe Optimal Blue will be accretive to our key financial metrics and will create significant value for our shareholders. Combining the strengths of Black Knight and Optimal Blue will give clients of both companies additional offerings from a single provider and will significantly expand Black Knight’s opportunities to cross-sell our comprehensive solutions,” added Jabbour.

Founded in 2014, Black Knight is a FinTech provider of integrated software, data and analytics solutions that facilitate and automate business processes across the homeownership lifecycle. It is transforming the mortgage industry by offering solutions that include Loan Servicing System, Loan Origination System, and Data as a Service. The firm recently partnered with Truist for origination & servicing technologies.