• Constellation Software (TSX:CSU) has acquired Black Knight Inc.’s (NYSE: BKI) Optimal Blue business for US$700 million
  • The Toronto-based software company paid US$200 million in cash and issued a US$500 million promissory note at 7 per cent interest to acquire the business
  • Owning the platform makes Constellation the largest mortgage software provider in the United States
  • Constellation Software Inc. last traded at C$2,871.25 per share

Constellation Software (TSX:CSU) has acquired Black Knight Inc.’s (NYSE: BKI) Optimal Blue business for US$700 million.

The Toronto-based software company paid US$200 million in cash and issued a US$500 million promissory note at 7 per cent interest to acquire the business and the Empower loan origination system (LOS) from Intercontinental Exchange Inc. (NYSE: ICE) and Black Knight.

“We have been looking forward to this day to announce that the Empower and Optimal Blue businesses are joining our group,” Romulus Group of Perseus Co-President Scott Smith said in a news release. “We are excited for the opportunity to work with Rich Gagliano and his entire team as they join us to lead the Empower business and with Kevin McMahon and his entire team as they join us to lead the Optimal Blue business. These teams have a proven track record of delivering innovation and leadership with their products, customers, and employees.”

Back in March, a deal was announced that would see Constellation Software buy Black Knight’s Empower loan origination system business.

“With these two recent acquisitions, we have assembled an incredible portfolio of independently run companies and products in the mortgage software space including the Empower LOS, Optimal Blue, NOVA LOS, Reverse Vision, and Axacore,” co-president of the Romulus Group of Perseus, Tom George, said in a statement. “We are excited to be able to work with all our groups to invest and grow both organically and through additional acquisitions.”

Optimal Blue provides data services to the mortgage industry and Intercontinental Exchange owns the New York Stock Exchange. Owning the platform makes Constellation the largest mortgage software provider in the United States.

Constellation Software Inc. develops and customizes software for public- and private-sector markets. The firm acquires, manages, and builds vertical-specific businesses. Its operations are organized into two segments: public sector and private sector. The portfolio companies serve various markets, including communications, credit unions, beverage distribution, tour operators, auto clubs, textiles and apparel, hospitality and community care.

Constellation Software Inc. last traded at C$2,871.25 per share and rose 1.2 per cent this week and 46.6 per cent this past year.

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