Black Knight to Acquire Plano, TX Based Optimal Blue for $1.8 Billion

GTCR backed Optimal Blue provides secondary market services in real estate transactions

By Benjamin Horney in Law360 on July 27, 2020

Black Knight Inc. will buy private equity-backed mortgage servicing software provider Optimal Blue in a deal guided by Weil and Kirkland that is worth roughly $1.8 billion, the companies said Monday.

The transaction sees Jacksonville, Florida-based Black Knight scooping up Plano, Texas-headquartered Optimal Blue and then combining it with its own fintech unit Compass Analytics to form a new entity alongside minority co-investors Cannae Holdings Inc. and Thomas H. Lee Partners LP, according to a statement. Black Knight will hold a stake of about 60% in the new company.

The companies have not yet decided on a name for the combined business, a spokesperson for Black Knight told Law360 on Monday.

The sellers of Optimal Blue are affiliates of private equity firm GTCR LLC.

Anthony Jabbour, CEO of Black Knight, said in the press release that “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 capabilities to our already robust set of solutions and enhancing our already comprehensive data and analytics capabilities,” Jabbour added.

Black Knight highlighted Optimal Blue’s software as a “leading marketplace platform” for the mortgage industry. In addition to its product, pricing and eligibility capabilities, the company offers secondary services including pipeline management, data and analytics and a loan-trading platform. Optimal Network says that roughly 1,000 originators and 185 investors use its product, pricing and eligibility platform.

“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,” said Scott Happ, CEO of Optimal Blue.

The agreement will be financed using cash, debt financing and equity contributions from Cannae and Thomas H. Lee. The deal is subject to regulatory approval and other conditions, and the companies expected to complete the transaction during the third quarter of this year.

Weil Gotshal & Manges LLP is advising Black Knight, with a team led by M&A partner Michael J. Aiello and including M&A partner Sachin Kohli and associates Sarah Fries, Michael Chenkin, Adena Kleiner and William Schoof.

Kirkland & Ellis LLP is advising GTCR and Optimal Blue, with a team led by corporate partners Stephen Ritchie and Christopher Thomas and associates Kyle McHugh and Brian Arnfelt.