8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): September 19, 2023 (September 14, 2023)

BLACK KNIGHT, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-37394	81-5265638
(State or Other Jurisdiction	(Commission	(I.R.S. Employer
of Incorporation)	File Number)	Identification No.)

601 Riverside Avenue

Jacksonville, Florida 32204

(Address of principal executive offices)

(Zip Code)

(904) 854-5100

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading
Symbol(s) Name of each exchange
on which registered

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.01. Completion of Acquisition or Disposition of Assets.

On September 14, 2023, Black Knight, Inc., a Delaware corporation (“Black Knight”), completed the previously announced sale of Black Knight’s Optimal Blue business division (the “OB Divestiture Transaction”), pursuant to that certain Equity Purchase Agreement, dated as of July 14, 2023 (the “OB Divestiture Agreement”), by and among Black Knight, Project Badger Holdco Inc. (“OB Purchaser”), a Delaware corporation and a subsidiary of Constellation Software Inc. (“Constellation”), and, solely for the purposes set forth in the OB Divestiture Agreement, Intercontinental Exchange, Inc., a Delaware corporation (“ICE”).

The purchase price payable by OB Purchaser to Black Knight under the OB Divestiture Agreement was approximately $700 million, comprised of $200 million in cash, subject to specified adjustments, and a promissory note issued by OB Purchaser to Black Knight in the principal amount of $500 million (the “Note”). The Note accrues interest at a rate of 7% per annum, compounded annually and payable in arrears. The first cash interest and amortization payment under the Note is due on the day prior to the fifth anniversary of the closing of the OB Divestiture Transaction (the “OB Divestiture Closing”) and thereafter interest and amortization payments will be due annually on the subsequent anniversaries of that date. The Note matures on the fortieth anniversary of the OB Divestiture Closing, subject to earlier optional prepayment. Black Knight is obligated to transfer the Note within six months of the OB Divestiture Closing to a third party that is not a seller of a mortgage product pricing and eligibility engine or loan origination system products.

The foregoing description of the OB Divestiture Transaction and the OB Divestiture Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the OB Divestiture Agreement, which is filed as Exhibit 2.1 hereto and incorporated by reference into this Item 2.01.

On September 14, 2023, Black Knight also completed the previously announced sale of Black Knight’s Empower loan origination system (LOS) business, including its Exchange, LendingSpace and AIVA solutions and products (the “Empower Divestiture Transaction,” and together with the OB Divestiture Transaction, the “Divestitures”), pursuant to that certain Equity Purchase Agreement, dated as of March 7, 2023 (the “Empower Divestiture Agreement”), by and among Black Knight, Constellation Web Solutions Inc. (“CWS”), a Delaware corporation and a subsidiary of Constellation, and, solely for the purposes set forth in the Empower Divestiture Agreement, ICE. The purchase price payable by CWS to Black Knight under the Empower Divestiture Agreement was approximately $40 million in cash, subject to specified adjustments.

Item 9.01 Financial Statements and Exhibits.

(b) Pro Forma Financial Information.

The unaudited pro forma condensed consolidated financial information of Black Knight has been derived from Black Knight’s historical financial statements and is being presented to give effect to the Divestitures. The unaudited pro forma condensed consolidated balance sheet of Black Knight as of June 30, 2023 and the unaudited pro forma condensed consolidated statements of earnings for the period ended June 30, 2023 and the years ended December 31, 2022, 2021 and 2020, and the related notes thereto, are furnished as Exhibit 99.1 to this Current Report on Form 8-K.

(d) Exhibits.

Exhibit No.	Description of Exhibit
2.1*	Equity Purchase Agreement, dated as of July 14, 2023, by and among Black Knight, Inc., Project Badger Holdco, Inc. and, solely for the purposes set forth therein, Intercontinental Exchange, Inc. (incorporated by reference to Exhibit 2.1 to Black Knight’s Current Report on Form 8-K, filed on July 17, 2023)
99.1	Unaudited Pro Forma Condensed Consolidated Financial Information
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Schedules omitted pursuant to Item 601(a)(5) of Regulation S-K. Black Knight, Inc. agrees to furnish supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request.

*    *    *

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

BLACK KNIGHT, INC.
By:	/s/ Andrew J. Surdykowski
Name:	Andrew J. Surdykowski
Title:	Vice President – Legal Counsel

Date: September 19, 2023

EX-99.1

Exhibit 99.1

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION

The following unaudited pro forma condensed consolidated financial information has been prepared to illustrate the estimated effects of the divestitures. The unaudited pro forma condensed consolidated balance sheet and unaudited pro forma condensed consolidated statements of earnings are based on the historical consolidated financial statements of Black Knight, Inc. (“Black Knight”).

The unaudited pro forma condensed consolidated financial information has been prepared in accordance with Article 11 of Regulation S-X.

The unaudited pro forma condensed consolidated financial information has been presented for informational purposes only. The unaudited pro forma condensed consolidated financial information does not necessarily reflect what the company’s financial condition or results of operations would have been had the divestiture occurred on the dates indicated. The unaudited pro forma condensed consolidated financial information also may not be useful in predicting the future financial condition and results of operations of the company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

The unaudited pro forma condensed consolidated financial information only reflects the divestiture transactions described above and in the notes to the unaudited pro forma condensed consolidated financial information and does not reflect any operating efficiencies and/or cost savings that Black Knight may achieve, or incremental costs associated with the company.

The unaudited pro forma condensed consolidated financial statements have been developed from and should be read in conjunction with the accompanying notes and the separate historical consolidated financial statements and the related notes thereto in Black Knight’s SEC filings.

Black Knight, Inc.

Unaudited Pro Forma Condensed Consolidated Balance Sheet Information

(In millions)

	As of June 30, 2023
	Black Knight			Transaction Accounting Adjustments			Pro Forma Adjustments		Notes		Pro Forma Black Knight
ASSETS
Current assets:
Cash and cash equivalents	$	15.9		$	(0.6	)	$	240.0		(a)	$	255.3
Trade receivables, net		205.4			(42.9	)		—				162.5
Prepaid expenses and other current assets		147.7			97.3			—		(f)		245.0
Total current assets		369.0			53.8			240.0				662.8
Property and equipment, net		129.2			(1.6	)		—				127.6
Software, net		424.9			(142.6	)		—				282.3
Other intangible assets, net		408.8			(335.8	)		—				73.0
Goodwill		3,747.8			(1,315.7	)		—				2,432.1
Investments		224.1			—			—				224.1
Deferred contract costs, net		189.2			(64.4	)		—				124.8
Other non-current assets		275.5			(158.6	)		500.0		(b)		616.9
Total assets	$	5,768.5		$	(1,964.9	)	$	740.0			$	4,543.6
LIABILITIES AND EQUITY
Current liabilities:
Trade accounts payable and other accrued liabilities	$	68.9		$	(8.7	)	$	—			$	60.2
Income taxes payable		23.4			(23.4	)		—		(f)		—
Accrued compensation and benefits		70.9			(11.5	)		—				59.4
Current portion of debt		43.8			—			—				43.8
Deferred revenues		50.3			(4.9	)		—				45.4
Total current liabilities		257.3			(48.5	)		—				208.8
Deferred revenues		31.1			(1.3	)		—				29.8
Deferred income taxes		204.9			(73.8	)		—		(f)		131.1
Long-term debt, net of current portion		2,401.9			—			—				2,401.9
Other non-current liabilities		46.4			(2.7	)		—				43.7
Total liabilities		2,941.6			(126.3	)		—				2,815.3
Redeemable noncontrolling interests		43.4			—			—				43.4
Equity:
Additional paid-in capital		1,363.7			—			—				1,363.7
Retained earnings		1,609.4			(1,838.6	)		740.0		(c)		510.8
Accumulated other comprehensive loss		(2.1	)		—			—				(2.1	)
Treasury stock, at cost		(187.5	)		—			—				(187.5	)
Total shareholders’ equity		2,783.5			(1,838.6	)		740.0				1,684.9
Total liabilities, redeemable noncontrolling interests and shareholders’ equity	$	5,768.5		$	(1,964.9	)	$	740.0			$	4,543.6

Black Knight, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Earnings

(In millions, except per share data)

	For the six months ended June 30, 2023
	Black Knight			Transaction Accounting Adjustments			Notes		Pro Forma Black Knight
Revenues	$	750.4		$	(185.2	)			$	565.2
Expenses:
Operating expenses		444.0			(121.8	)				322.2
Depreciation and amortization		164.7			(73.9	)				90.8
Total expenses		608.7			(195.7	)				413.0
Operating income		141.7			10.5					152.2
Other income and expense:
Interest expense, net		(63.6	)		(1.5	)				(65.1	)
Other income, net		188.0			—					188.0
Total other income, net		124.4			(1.5	)				122.9
Earnings before income taxes and equity in losses of unconsolidated affiliates		266.1			9.0					275.1
Income tax expense		67.1			2.3			(e)		69.4
Earnings before equity in losses of unconsolidated affiliates		199.0			6.7					205.7
Equity in losses of unconsolidated affiliates, net of tax		(1.9	)		—					(1.9	)
Net earnings	$	197.1		$	6.7				$	203.8
Net earnings per share:
Basic	$	1.27		$	0.04				$	1.31
Diluted	$	1.27		$	0.04				$	1.31
Weighted average shares of common stock outstanding:
Basic		154.8								154.8
Diluted		155.7								155.7

Black Knight, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Earnings

(In millions, except per share data)

	For the year ended December 31, 2022
				Transaction
				Accounting					Pro Forma
	Black Knight			Adjustments			Notes		Black Knight
Revenues	$	1,551.9		$	(379.6	)			$	1,172.3
Expenses:
Operating expenses		904.1			(241.0	)				663.1
Depreciation and amortization		369.6			(172.8	)				196.8
Total expenses		1,273.7			(413.8	)				859.9
Operating income		278.2			34.2					312.4
Other income and expense:
Interest expense, net		(100.6	)		2.1					(98.5	)
Other expense, net		(11.9	)		—					(11.9	)
Total other expense, net		(112.5	)		2.1					(110.4	)
Earnings before income taxes and equity in earnings of unconsolidated affiliates		165.7			36.3					202.0
Income tax expense		22.4			9.3			(e)		31.7
Earnings before equity in earnings of unconsolidated affiliates		143.3			27.0					170.3
Equity in earnings of unconsolidated affiliates, net of tax		306.7			—					306.7
Net earnings		450.0			27.0					477.0
Net losses attributable to redeemable noncontrolling interests		2.5			(2.5	)		(g)		—
Net earnings attributable to Black Knight	$	452.5		$	24.5				$	477.0
Net earnings per share:
Basic	$	2.93		$	0.16				$	3.09
Diluted	$	2.91		$	0.16				$	3.07
Weighted average shares of common stock outstanding:
Basic		154.4								154.4
Diluted		155.6								155.6

Black Knight, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Earnings

(In millions, except per share data)

	For the year ended December 31, 2021
				Transaction
				Accounting					Pro Forma
	Black Knight			Adjustments			Notes		Black Knight
Revenues	$	1,475.2		$	(351.4	)			$	1,123.8
Expenses:
Operating expenses		807.2			(216.7	)				590.5
Depreciation and amortization		365.0			(172.4	)				192.6
Total expenses		1,172.2			(389.1	)				783.1
Operating income		303.0			37.7					340.7
Other income and expense:
Interest expense, net		(83.6	)		8.2					(75.4	)
Other expense, net		(6.4	)		—					(6.4	)
Total other expense, net		(90.0	)		8.2					(81.8	)
Earnings before income taxes and equity in earnings of unconsolidated affiliates		213.0			45.9					258.9
Income tax expense		35.7			11.6			(e)		47.3
Earnings before equity in earnings of unconsolidated affiliates		177.3			34.3					211.6
Equity in earnings of unconsolidated affiliates, net of tax		2.6			—					2.6
Net earnings		179.9			34.3					214.2
Net losses attributable to redeemable noncontrolling interests		28.0			(28.0	)		(g)		—
Net earnings attributable to Black Knight	$	207.9		$	6.3				$	214.2
Net earnings per share:
Basic	$	1.34		$	0.04				$	1.38
Diluted	$	1.33		$	0.04				$	1.37
Weighted average shares of common stock outstanding:
Basic		155.1								155.1
Diluted		155.8								155.8

Black Knight, Inc.

Unaudited Pro Forma Condensed Consolidated Statement of Earnings

(In millions, except per share data)

	For the year ended December 31, 2020
	Black Knight			Transaction Accounting Adjustments			Pro Forma Adjustments			Notes		Pro Forma Black Knight
Revenues	$	1,238.5		$	(204.9	)	$	—				$	1,033.6
Expenses:
Operating expenses		701.0			(137.2	)		—					563.8
Depreciation and amortization		270.7			(85.4	)		—					185.3
Total expenses		971.7			(222.6	)		—					749.1
Operating income		266.8			17.7			—					284.5
Other income and expense:
Interest expense, net		(62.9	)		3.4			—					(59.5	)
Other income (expense), net		16.4			—			(1,463.8	)		(d)		(1,447.4	)
Total other expense, net		(46.5	)		3.4			(1,463.8	)				(1,506.9	)
Earnings (loss) before income taxes and equity in earnings of unconsolidated affiliates		220.3			21.1			(1,463.8	)				(1,222.4	)
Income tax expense (benefit)		41.6			5.3			(370.3	)		(e), (f)		(323.4	)
Earnings (loss) before equity in earnings of unconsolidated affiliates		178.7			15.8			(1,093.5	)				(899.0	)
Equity in earnings of unconsolidated affiliates, net of tax		67.1			—			—					67.1
Net earnings (loss)		245.8			15.8			(1,093.5	)				(831.9	)
Net losses attributable to redeemable noncontrolling interests		18.3			(18.3	)		—			(g)		—
Net earnings (loss) attributable to Black Knight	$	264.1		$	(2.5	)	$	(1,093.5	)			$	(831.9	)
Net earnings per share:
Basic	$	1.74		$	(0.02	)	$	(7.19)				$	(5.47	)
Diluted	$	1.73		$	(0.02	)	$	(7.15)				$	(5.44	)
Weighted average shares of common stock outstanding:
Basic		152.0											152.0
Diluted		152.9											152.9

Black Knight, Inc.

Notes to the Unaudited Pro Forma Condensed Consolidated Financial Information

1) Basis of Presentation

On May 4, 2022, Black Knight, Inc., a Delaware corporation (“Black Knight”), entered into an Agreement and Plan of Merger (the “Original Merger Agreement”), with Intercontinental Exchange, Inc., a Delaware corporation (“ICE”), and Sand Merger Sub Corporation, a Delaware corporation and a wholly owned subsidiary of ICE (“Sub”), as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated as of March 7, 2023 (the “Amendment”, and the Original Merger Agreement as amended by the Amendment, the “Merger Agreement”). Pursuant to the terms and subject to the conditions set forth in the Merger Agreement, Sub merged with and into Black Knight (the “Merger” and, collectively with the other transactions contemplated by the Merger Agreement, the “Merger Transactions”), with Black Knight continuing as the surviving corporation and as a wholly owned subsidiary of ICE. In connection with entering into the Amendment, on March 7, 2023, at the request of ICE, Black Knight entered into an Equity Purchase Agreement (as amended, the “Empower Divestiture Agreement”) with Constellation Web Solutions Inc., a Delaware corporation and a subsidiary of Constellation Software Inc. (“Constellation”), and ICE (solely for the purposes set forth in the Empower Divestiture Agreement) in furtherance of the transactions contemplated by the Merger Agreement. Black Knight and ICE executed the Empower Divestiture Agreement in order to seek to address certain alleged antitrust concerns raised by the U.S. Federal Trade Commission (“FTC”) regarding the transactions contemplated by the Merger Agreement.

Pursuant to the terms and subject to the conditions set forth in the Empower Divestiture Agreement, after the closing of the Merger, Constellation purchased Black Knight’s Empower loan origination system (LOS), including its Exchange, LendingSpace and AIVA solutions (the “Empower Divested Business”) from Black Knight (collectively with the other transactions contemplated by the Empower Divestiture Agreement, the “Empower Divestiture Transaction”).

On July 14, 2023, at the request of ICE, Black Knight entered into an Equity Purchase Agreement (as amended, the “OB Divestiture Agreement”) with Project Badger Holdco Inc. (“Purchaser”), a Delaware corporation and a subsidiary of Constellation, and ICE (solely for the purposes set forth in the OB Divestiture Agreement) in furtherance of the transactions contemplated by the Merger Agreement. Black Knight and ICE executed the OB Divestiture Agreement in order to address certain alleged antitrust concerns raised by the FTC in its lawsuits against Black Knight and ICE regarding the Merger Transactions.

Pursuant to the terms and subject to the conditions set forth in the OB Divestiture Agreement, after the completion of the Merger, Purchaser purchased Black Knight’s Optimal Blue business division (the “OB Divested Business”) from Black Knight (collectively with the other transactions contemplated by the OB Divestiture Agreement, the “OB Divestiture Transaction”). The purchase price payable by Purchaser to Black Knight under the OB Divestiture Agreement was $700 million, comprised of $200 million in cash and a promissory note issued by Purchaser to Black Knight at the closing of the OB Divestiture Transaction (the “OB Divestiture Closing”) in the principal amount of $500 million (the “Note”), subject to specified adjustments. The Note accrues interest at a rate of 7% per annum, compounded annually and payable in arrears. The first cash interest and amortization payment under the Note is due on the day prior to the fifth anniversary of the OB Divestiture Closing and thereafter interest and amortization payments will be due annually on the subsequent anniversaries of that date. The Note matures on the fortieth anniversary of the OB Divestiture Closing, subject to earlier optional prepayment. Black Knight is obligated to transfer the Note within six months of the OB Divestiture Closing to a third party that is not a seller of a mortgage product pricing and eligibility engine or loan origination system products.

On September 5, 2023, the Merger was completed. On September 14, 2023, the Empower Divestiture Transaction and OB Divestiture Transaction were completed. The preceding unaudited pro forma condensed consolidated financial information of Black Knight is presented to illustrate the estimated effects of the Empower Divestiture Transaction and OB Divestiture Transaction on the historical financial information of Black Knight.

Accounting Periods Presented

The unaudited pro forma condensed consolidated balance sheet as of June 30, 2023 was based on the unaudited historical financial statements of Black Knight. The unaudited pro forma condensed consolidated balance sheet gives effect to the Empower Divestiture Transaction, OB Divestiture Transaction and financing activities as if they had been completed June 30, 2023. The unaudited pro forma condensed consolidated statement of earnings for the period ended June 30, 2023 was based on the unaudited historical financial statements of Black Knight. The unaudited pro forma condensed consolidated statements of earnings for the period ended June 30, 2023 and the years ended December 31, 2022, 2021 and 2020 gives effect to the Empower Divestiture Transaction as if it had been completed on January 1, 2020, the first day of Black Knight’s fiscal year. The unaudited pro forma condensed consolidated statements of earnings for the period ended June 30, 2023 and the years ended December 31, 2022, 2021 and 2020 give effect to the OB Divestiture Transaction as if it had been completed on September 15, 2020, the day Black Knight acquired Optimal Blue.

2) Adjustments to the Unaudited Pro Forma Condensed Consolidated Financial Information

Adjustments included in the column under the heading “Transaction Accounting Adjustments” represent the removal of assets and liabilities related to the Empower Divested Business and OB Divested Business for the applicable reporting period. Retained earnings reflects adjustments for the loss on sale of the assets and liabilities. Other adjustments included represent the following:

(a) Adjustment for cash proceeds of $40 million and $200 million received in the Empower Divestiture Transaction and OB Divestiture Transaction, respectively.

(b) Adjustment for the $500 million principal amount of the Note with Constellation for the OB Divestiture Transaction. Black Knight is obligated to transfer the Note within six months of the OB Divestiture Closing to a third party that is not a seller of a mortgage product pricing and eligibility engine or loan origination system products. The proceeds related to the Note are not able to be estimated at this time and may differ materially from the Note principal amount.

(c) Adjustment for total purchase price of $40 million and $700 million in the Empower Divestiture Transaction and OB Divestiture Transaction, respectively.

(d) Adjustment for the loss on sale of the Empower Divested Business as if the Empower Divestiture Transaction had been completed on January 1, 2020 and the loss on sale of the OB Divested Business as if the OB Divestiture Transaction had been completed on September 15, 2020, the day Black Knight acquired Optimal Blue.

(e) Adjustment for the estimated income tax impact related to the Empower Divested Business and OB Divested Business based on our statutory tax rate of 25.5% for the period ended June 30, 2023 and the years ended December 31, 2022, 2021 and 2020.

(f) Adjustment for the estimated income tax impact related to the sale of the Empower Divested Business and OB Divested Business and related transactions based on our statutory tax rate of 25.5%, including the recognition of an income tax benefit, which is included in Prepaid expenses and other current assets as of June 30, 2023.

(g) Adjustment to eliminate the noncontrolling interest related to the OB Divested Business.

XML

Document and Entity Information	Sep. 14, 2023
Cover [Abstract]
Security 12b Title	Common Stock, $0.0001 par value per share
Trading Symbol	BKI
Security Exchange Name	NYSE
Amendment Flag	false
Entity Central Index Key	0001627014
Document Type	8-K
Document Period End Date	Sep. 14, 2023
Entity Registrant Name	BLACK KNIGHT, INC.
Entity Incorporation State Country Code	DE
Entity File Number	001-37394
Entity Tax Identification Number	81-5265638
Entity Address, Address Line One	601 Riverside Avenue
Entity Address, City or Town	Jacksonville
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32204
City Area Code	(904)
Local Phone Number	854-5100
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false