MERS owner Intercontinental Exchange to buy Ellie Mae for cash, stock
Intercontinental Exchange said it agreed to acquire Ellie Mae Inc. from private equity firm Thoma Bravo LLC in a deal that values the mortgage-lending platform at about $11 billion.
The owner of the New York Stock Exchange will pay a combination of stock and cash for Pleasanton, Calif.-based Ellie Mae, according to a statement Thursday. Further terms weren’t disclosed.
Thoma Bravo took Ellie Mae private in a $3.7 billion deal in February 2019.
Ellie Mae operates a cloud-based platform serving the mortgage-finance industry, and its technology will allow ICE to expand its own mortgage-servicing business. ICE reported $90 million in mortgage-servicing revenue for the first half of 2020, a 40% increase from a year earlier. ICE Chief Executive Officer Jeff Sprecher said on an earnings call in July that mortgage servicing is the fastest-growing business on the company's platform.
"We have a business that is part of nearly every U.S. mortgage closing process, collecting, marshaling and storing critical data," Sprecher said in July. "U.S. mortgage back-office workflow is ripe for automation and greater efficiency."
Intercontinental Exchange shares have gained 5.3% this year in New York. They rose $1.30 to $97.46 in regular trading Thursday before the announcement.
More than 40% of annual U.S. mortgage originations are processed using Ellie Mae software, according to Erica Bigley, a company spokesperson. That gives Ellie Mae insight into trends such as borrowers’ credit profiles and changing underwriting standards.