Black Knight Financial Services Inc., the mortgage technology company backed by private-equity firm Thomas H. Lee Partners, is seeking to raise as much as $425 million in an initial public offering.
The offering is for 17 million shares at $22 to $25 apiece, according to a prospectus filed Monday with the U.S. Securities and Exchange Commission. There will be about 64.1 million "A" shares outstanding after the planned sale, with Thomas H. Lee holding a majority of the stock in the class, according to the document.
Black Knight, a division of title insurer Fidelity National Financial Inc., expects to benefit from growing demand for its data as regulators increase oversight of the mortgage market. The Jacksonville, Fla.-based company provides information on property valuation and collateral risk to originators and mortgage servicers and offers technology that can connect lenders, agents and investors in the U.S.
"We have aggregated the largest residential real estate data set in the United States that is derived from both proprietary and public data sources," Black Knight said in an earlier filing. "Our established client base presents a substantial opportunity for growth."
Black Knight had net earnings of $14.5 million in the three months ended March 31 on revenue of $227.2 million. In 2014, the company had a net loss of $107.1 million for the full year. The offering could include as many as 19.6 million shares including an over-allotment option.
Fidelity National is the largest provider of title insurance, in which companies use their records and public documents to verify a seller is a property's true owner and that it's free from liens. The company would retain voting control over Black Knight after the IPO through its ownership of Class B stock, the document shows.
The insurer has repeatedly shifted its bets on mortgage servicing. In 2014, the company joined with Thomas H. Lee to buy Lender Processing Services Inc. for more than $3 billion in cash and stock. Fidelity National and Thomas H. Lee designated part of LPS as Black Knight, led by Tom Sanzone, who previously worked for banks including Merrill Lynch & Co. and Citigroup Inc.
LPS operations trace their roots to Fidelity National, and the business became a public company through reorganizations that began in 2006. LPS agreed in January 2013 to pay $127 million in a settlement with 46 states over improper foreclosure practices, including the "robosigning" of documents used to repossess homes.
Thomas H. Lee has taken portfolio companies public since late 2013, including food-service provider Aramark and GrubHub Inc., which runs food-ordering websites.
JPMorgan Chase & Co., Bank of America Corp. and Wells Fargo & Co. are among banks managing the offering. Shares of Black Knight will be listed on the New York Stock Exchange under the ticker BKFS.
