Black Knight, Inc. announced a definitive agreement to acquire Optimal Blue, a prominent provider of secondary market solutions and actionable analytics for the mortgage industry, from the private equity firm GTCR. The acquisition is valued at approximately $1.8 billion. Concurrently, Black Knight has entered into an agreement to divest its Empower loan origination system (LOS) business to Constellation Mortgage Solutions (CMS), a portfolio company of Constellation Software Inc., for $300 million. This divestiture is contingent upon the successful completion of the Optimal Blue acquisition.
Optimal Blue offers a comprehensive suite of solutions, including product and pricing engines (PPE), as well as hedging, trading, and data analytics tools that support secondary market operations for mortgage lenders. The platform facilitates over 35% of all agency-backed mortgage loan originations, assisting lenders in managing capital markets functions and connecting with investors. Optimal Blue’s solutions are utilized by approximately 1,000 banks, credit unions, and independent mortgage lenders.
Black Knight’s Empower LOS is a significant component of its existing mortgage technology portfolio, providing end-to-end loan origination capabilities. The decision to divest Empower aligns with Black Knight’s strategic focus following the Optimal Blue acquisition. Upon the completion of both transactions, Black Knight intends to integrate Optimal Blue’s offerings, enhancing its market position in mortgage technology and data.
The acquisition of Optimal Blue and the divestiture of Empower LOS are expected to be completed in the third quarter of 2020. The transactions are subject to customary closing conditions and regulatory approvals. Black Knight anticipates these strategic moves will contribute to its long-term growth and enable a more specialized focus on core lending technology and data solutions.
