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Intercontinental (ICE) Sells Optimal Blue Due to Merger Concerns
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Intercontinental Exchange, Inc. (ICE - Free Report) and Black Knight, Inc. have agreed to divest Optimal Blue to address regulatory concerns amid their pending merger. This move is expected to ease anti-trust concerns posed by U.S. Federal Trade Commission regarding ICE gaining pricing power following the combination.
This move bodes well for Intercontinental, aiming to strengthen its mortgage technology business. The Mortgage Technology segment’s recurring revenues accounted for 17.3% of ICE’s total recurring revenues in the first quarter of 2023. As the company remains focused on improving the mix of high-growth recurring revenues, the Black Knight buyout should aid it in the accomplishment of the same. This will also improve the earnings performance of ICE. Following the completion of this merger, the mortgage lending and borrowing process will become more efficient and reduce overall costs for ICE in the future.
Black Night’s Optimal Blue is sold to Constellation Software, a Toronto-based business, for $700 million. Constellation will pay $200 million at the onset, while the remaining $500 million would consist of promissory notes to Black Night. Constellation also bought Black Night’s Empower Loan origination software business in March 2023. This move will help facilitate ICE and BKI’s pending merger. Moreover, ICE’s offer for BKI’s shares fell from $85 per share to $75 following the divestiture announcement.
The merger is expected to reduce costs per mortgage origination, overlay the safety and soundness practices and create new products and services for lenders to increase homeownership. Moreover, the combination will help current homeowners minimize their monthly payments and decrease the possibility of a default.
Zacks Rank and Price Performance
Intercontinental currently carries a Zacks Rank #2 (Buy). Shares of Intercontinental have gained 20.5% in the past year compared with the industry’s 6.5% growth.
The bottom line of Moody’s Corporation outpaced estimates in two of the trailing four quarters, while it missed twice, the average surprise being 7.3%.
The Zacks Consensus Estimate for MCO’s 2023 earnings per share is pegged at $9.84, while the same for revenues is pegged at $5.9 billion for 2023. The consensus mark for MCO’s 2023 earnings has moved 0.7% north in the past 30 days.
WisdomTree’s bottom line outpaced estimates in one of the trailing four quarters, met twice and missed once. The average of earnings surprises is 6.9%.
The Zacks Consensus Estimate for WT’s 2023 earnings indicates a 34.6% rise, while the same for revenues suggests 15.2% growth from the respective prior-year reported figures.
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Intercontinental (ICE) Sells Optimal Blue Due to Merger Concerns
Intercontinental Exchange, Inc. (ICE - Free Report) and Black Knight, Inc. have agreed to divest Optimal Blue to address regulatory concerns amid their pending merger. This move is expected to ease anti-trust concerns posed by U.S. Federal Trade Commission regarding ICE gaining pricing power following the combination.
This move bodes well for Intercontinental, aiming to strengthen its mortgage technology business. The Mortgage Technology segment’s recurring revenues accounted for 17.3% of ICE’s total recurring revenues in the first quarter of 2023. As the company remains focused on improving the mix of high-growth recurring revenues, the Black Knight buyout should aid it in the accomplishment of the same. This will also improve the earnings performance of ICE. Following the completion of this merger, the mortgage lending and borrowing process will become more efficient and reduce overall costs for ICE in the future.
Black Night’s Optimal Blue is sold to Constellation Software, a Toronto-based business, for $700 million. Constellation will pay $200 million at the onset, while the remaining $500 million would consist of promissory notes to Black Night. Constellation also bought Black Night’s Empower Loan origination software business in March 2023. This move will help facilitate ICE and BKI’s pending merger. Moreover, ICE’s offer for BKI’s shares fell from $85 per share to $75 following the divestiture announcement.
The merger is expected to reduce costs per mortgage origination, overlay the safety and soundness practices and create new products and services for lenders to increase homeownership. Moreover, the combination will help current homeowners minimize their monthly payments and decrease the possibility of a default.
Zacks Rank and Price Performance
Intercontinental currently carries a Zacks Rank #2 (Buy). Shares of Intercontinental have gained 20.5% in the past year compared with the industry’s 6.5% growth.
Image Source: Zacks Investment Research
Other Stocks to Consider
Some other top-ranked stocks from the broader Finance space are Moody's Corporation (MCO - Free Report) and WisdomTree, Inc. (WT - Free Report) . Moody’s currently sports a Zacks Rank #1 (Strong Buy), while Wisdom Tree carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Moody’s Corporation outpaced estimates in two of the trailing four quarters, while it missed twice, the average surprise being 7.3%.
The Zacks Consensus Estimate for MCO’s 2023 earnings per share is pegged at $9.84, while the same for revenues is pegged at $5.9 billion for 2023. The consensus mark for MCO’s 2023 earnings has moved 0.7% north in the past 30 days.
WisdomTree’s bottom line outpaced estimates in one of the trailing four quarters, met twice and missed once. The average of earnings surprises is 6.9%.
The Zacks Consensus Estimate for WT’s 2023 earnings indicates a 34.6% rise, while the same for revenues suggests 15.2% growth from the respective prior-year reported figures.