GTCR to sell digital mortgage marketplace Optimal Blue to Black Knight for $1.8bn

Private equity firm GTCR has agreed to divest Optimal Blue, a secondary market solutions and actionable data services provider to Black Knight, a provider of integrated software, data and analytics to the mortgage and real estate sectors, for $1.8 billion in an all-cash deal.

Black Knight said that it will merge its Compass Analytics business with Optimal Blue in a newly created entity with minority co-investors Cannae Holdings and Thomas H. Lee Partners (THL). The company will hold a stake of around 60% of the new entity.

Established in 2002, Optimal Blue is a SaaS mortgage marketplace that caters to residential mortgage originators and investors. The company is claimed to serve over 3,500 institutions in the secondary mortgage market, with a broad presence across commercial banks, credit unions, mortgage banks, and mortgage brokerage firms.

Collin Roche – GTCR Managing Director said: “Optimal Blue has transformed into a true digital marketplace with significantly enhanced capabilities and broader reach and relevance to market participants. It has grown its client base, expanded its integrations with the mortgage technology ecosystem, and solidified its unique position at the nexus of commerce and transaction flows within the secondary mortgage market.

“We believe the Company is well-positioned to continue its growth as part of Black Knight.”

Optimal Blue is claimed to facilitate nearly $2 trillion of mortgage transactions per year and locks 35% of all mortgages completed across the world. The company offers a range of market functions via its digital marketplace, which include real-time price discovery, best execution, counterparty oversight, workflow automation, risk management, and data services.

Optimal Blue’s solutions suite includes its lead product pricing engine, its integrated hedging and trading platform, mortgage insurance distribution, compliance solutions, data and analytics, and integrated services with third-party vendors.

Anthony Jabbour – CEO of Black Knight said: “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.”

The deal, which is subject to regulatory approval and meeting of other customary closing conditions, is likely to close in Q3 2020.