Acquisitions and Divestitures

12 Months Ended

Dec. 31, 2023

Business Combination and Asset Acquisition [Abstract]


Company	Transaction Date	Primary Segment	Description
Black Knight, Inc., or Black Knight	Acquired on 9/5/2023	Mortgage Technology	Black Knight is a software, data and analytics company that serves the housing finance continuum, including real estate data, mortgage lending and servicing, as well as the secondary markets. See below for the Black Knight preliminary purchase price allocation and supplemental pro forma financial information. Pursuant to the certain Agreement and Plan of Merger, dated as of May 4, 2022, among ICE, Sand Merger Sub Corporation, a wholly owned subsidiary of ICE, or Sub, and Black Knight, which we refer to as the “merger agreement,” Sub merged with and into Black Knight, which we refer to as the “merger,” with Black Knight surviving as a wholly owned subsidiary of ICE.
Bakkt Holdings, Inc., or Bakkt	Deconsolidated on 10/15/2021	Exchanges	Bakkt is a business with an integrated platform that enables consumers and institutions to transact in digital assets. The Bakkt platform consists of two complementary aspects: a digital asset marketplace and loyalty redemption services. In 2021, Bakkt completed its merger with VPC Impact Acquisition Holdings, or VIH, a special purpose acquisition company sponsored by Victory Park Capital, or VPC. Following the closing, as a consequence of our inability to meet the power criterion through our variable interest and because of holding a minority voting interest in the combined company, during the fourth quarter of 2021 we deconsolidated Bakkt upon loss of control and prospectively treat it as an equity method investment within our financial statements.

During 2023, 2022 and 2021, we acquired multiple companies which were not material to our operations.

Black Knight, Inc. Acquisition

On September 5, 2023, we acquired 100% of Black Knight for aggregate transaction consideration of approximately $11.8 billion, or $76 per share of Black Knight common stock, with cash comprising 90% of the value of the aggregate transaction consideration. The aggregate cash component of the transaction consideration was $10.5 billion. We issued 10.9 million shares of ICE common stock to Black Knight stockholder, which was based on the market price of our common stock and the average of the volume weighted averages of the trading prices of our common stock on each of the ten consecutive trading days ending three trading days prior to the closing of the merger. We expect that this transaction will build on our position as a provider of end-to-end electronic workflow solutions for the rapidly evolving U.S. residential mortgage industry. We believe the Black Knight ecosystem adds value for clients of all sizes across the mortgage and real estate lifecycles by helping organizations lower costs, increase efficiencies, grow their businesses, and reduce risk.

On September 14, 2023, or the Divestiture Date, in connection with the merger agreement, we sold Black Knight's Optimal Blue and Empower loan origination system, or LOS, businesses, or the Divestitures, to subsidiaries of Constellation Software, Inc. The cash proceeds from the Divestitures were $241 million. The structure of the Optimal Blue transaction also included a promissory note with a face value of $500 million, or the Promissory Note, issued by the purchaser to Black Knight, as a subsidiary of ICE, at the closing of the transaction. The Promissory Note has a 40-year term with a maturity date of September 5, 2063, and a coupon interest rate of 7.0% per year. As discussed in more detail below, the Promissory Note was valued at $235 million on the Divestiture Date. In accordance with Accounting Standards Codification, or ASC, 805, Business Combinations, or ASC 805, as well as ASC 360, Impairment and Disposal of Long-Lived Assets, we are required to measure an acquired long-lived asset or disposal group that is classified as held for sale at the acquisition date at fair value less cost to sell. Accordingly, there was no gain or loss recognized on the Divestitures.

For the period between the acquisition date of September 5, 2023 through the Divestiture Date, the discontinued operations of Empower and Optimal Blue were immaterial and have been included in acquisition-related transaction and

integration costs in our consolidated statements of income.

Pursuant to the Agreement Containing Consent Orders entered into between the Federal Trade Commission, or the FTC, and ICE and Black Knight, the Promissory Note was required to be sold within six months of the Divestiture Date. On February 7, 2024, the FTC approved the buyer of the Promissory Note and the proceeds of the Promissory Note sale will be paid to Black Knight in the near future. We have elected the fair value option for the right to receive the net proceeds of the sale of the Promissory Note, which was valued at $235 million based on Level 3 inputs on the Divestiture Date (Note 18). As we elected the fair value option for the Promissory Note, we are required to mark the asset to fair value each reporting period. For subsequent measurement as of December 31, 2023, we wrote down the value of the Promissory Note, resulting in a fair value loss of $160 million (Note 18).

The estimated net fair value of the consideration transferred for Black Knight was approximately $11.4 billion as of the acquisition date, which consisted of the following (in millions):


	Transaction Consideration
Cash	$	10,542
ICE common stock*	1,274
Converted vested Black Knight awards	22
Total preliminary purchase price	$	11,838
Less: Divestitures	$	(476)
Total net preliminary purchase price	$	11,362

* Fair value of the ICE common stock is based on the ICE closing stock price on September 1, 2023.

The purchase price has been allocated to the net tangible and identifiable intangible assets and liabilities based on the preliminary respective estimated fair values on the date of acquisition. The excess of purchase price over the net tangible and identifiable intangible assets has been recorded as goodwill, of which $186 million is expected to be deductible for tax purposes. Goodwill represents potential revenue synergies related to new product development, various expense synergies and opportunities to enter new markets and is assigned to our Mortgage Technology business segment. The preliminary purchase price allocation is as follows (in millions):


	Net Preliminary Purchase Price Allocation
Cash and cash equivalents	$	108
Property and equipment	119
Goodwill	9,417
Identifiable intangibles	4,948
Debt acquired	(2,397)
Other assets and liabilities, net	80
Deferred tax liabilities on identifiable intangibles	(1,266)
Other deferred tax assets	353
Net preliminary purchase price	$	11,362

In performing the net preliminary purchase price allocation, we considered, among other factors, the intended future use of acquired assets, analysis of historical financial performance and estimates of future performance of the Black Knight business. For the identified intangible assets, the fair values have been preliminarily determined using the income and cost approaches and are partially based on inputs that are unobservable including forecasted future cash flows, revenue and margin growth rates, customer attrition rates and discount rates that require judgement and are subject to change. We have not yet obtained all of the information related to the fair value of the acquired assets and liabilities.

The primary areas of the preliminary purchase price allocation that are not yet finalized relate to the valuation of the identifiable intangible assets, income taxes, and certain other tangible assets and liabilities. The allocation of the purchase price will be finalized upon the completion of the analysis of the acquired assets and liabilities within one year of the date of acquisition.

The following table sets forth the components of the preliminary intangible assets associated with the acquisition as of December 31, 2023 (in millions, except years):


	Acquisition-Date Preliminary Fair Value		Accumulated Amortization		Net Book Value		Weighted average life (Years)
Developed Technology	$	1,129	$	(39)	$	1,090	10
Trademarks/tradenames	159		(3)		156		19
Customer Relationships	3,034		(80)		2,954		13
Data and Databases	579		(19)		560		10
In-process Research & Development	47		—		47		N/A
Total	$	4,948	$	(141)	$	4,807	12

From the acquisition date through December 31, 2023, Black Knight revenues of $363 million, which are included in our mortgage technology revenues, and operating expenses of $470 million were recorded in our consolidated statements of income.

The financial information in the table below summarizes the combined results of operations of ICE and Black Knight, on a pro forma basis, as though the companies had been combined as of the beginning of the prior period presented. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the period presented. Such unaudited pro forma financial information is based on the historical financial statements of ICE and Black Knight. This unaudited pro forma financial information is based on estimates and assumptions that have been made solely for purposes of developing such unaudited pro forma information, including, without limitation, purchase accounting adjustments, interest expense on debt issued to finance the purchase price, acquisition-related transaction costs, the removal of historical Black Knight intangible asset amortization and the addition of intangible asset amortization related to this acquisition. The unaudited pro forma financial information does not reflect any synergies or operating cost reductions that have been and may be achieved from the combined operations. The unaudited pro forma financial information combines the historical results for us and Black Knight for 2023 and 2022 in the following table (in millions).


	Year Ended December 31,
	2023		2022
Total revenues, less transaction-based expenses	$	8,735	$	8,416


Net income attributable to ICE	$	2,128	$	1,110

Transaction-based expenses included within revenues, less transaction-based expenses in the table above, were not impacted by pro forma adjustments and agree to the amounts presented historically in our consolidated income statements as they relate solely to ICE and not to Black Knight.

Bakkt Transaction

On October 15, 2021, Bakkt completed its merger with VPC Impact Acquisition Holdings, or VIH, a special purpose acquisition company sponsored by Victory Park Capital, or VPC. Following completion of the business combination, we held an approximate 68% economic interest. As a result of limitations on ICE from the Bakkt voting agreement entered into in connection with the transaction, we hold a minority voting interest in the combined company. Prior to the closing, Bakkt revenues and operating expenses were reported within our consolidated revenues and operating expenses. Following the closing, as a consequence of our inability to meet the power criterion through our variable interest and because of holding a minority voting interest in the combined company, during the fourth quarter of 2021 we deconsolidated Bakkt upon loss of control and prospectively treat it as an equity method investment within our financial statements. We recorded a pre-tax gain on the transaction of $1.4 billion during the fourth quarter of 2021, which is included in other non-operating income within our consolidated income statement. The pre-tax gain is a result of recording an equity method investment value of $1.7 billion plus the removal of our redeemable non-controlling interest liability of $107 million, partially offset by the deconsolidation of Bakkt net assets of $295 million and our additional PIPE contribution of $47 million. As of December 31, 2023, we held an approximate 64% economic interest in Bakkt.