GTCR Announces Sale of Optimal Blue to Black Knight

Sale of Rapidly Growing Company Represents Culmination of GTCR's Investment in Strategic Transformation

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Jul 27, 2020, 09:09 ET

CHICAGO, July 27, 2020 /PRNewswire/ -- GTCR, a leading private equity firm, announced today that it has signed a definitive agreement to sell Optimal Blue ("Optimal Blue" or the "Company") to Black Knight (NYSE:BKI) for an enterprise value of $1.8 billion, payable in cash.

Founded in 2002, Optimal Blue operates the residential mortgage industry's leading digital marketplace, connecting approximately 3,500 mortgage lenders and brokers with 185 mortgage investors through a digital network that facilitates approximately $2 trillion of transactions annually. Market participants use Optimal Blue's network to exchange pricing, eligibility terms, and other critical transaction data for a wide array of secondary mortgage market interactions. In addition to facilitating commerce between mortgage originators and investors, Optimal Blue also supports a broader ecosystem of secondary marketplace participants, including mortgage insurance firms, digital point-of-sale solutions, and other third-party vendors who leverage Optimal Blue's network and data assets to improve their own products and service offerings.

GTCR partnered with industry veteran Scott Happ, founder and former CEO of Mortgagebot, to acquire Optimal Blue in July 2016. Under Scott Happ's leadership, the Company executed a strategic transformation to an open, real-time, cloud-based marketplace operator positioned at the center of the secondary mortgage market. While executing this transformation, GTCR and Scott Happ assembled an industry-leading management team to refine operations, optimize sales execution, and invest in product development and innovation. The Company has added incremental capabilities and functionality to broaden its core product offerings and developed new offerings in compliance, data analytics, and mortgage insurance distribution. The Company also completed three acquisitions to add complementary capabilities and expand its client base to support its organic expansion efforts.

"GTCR is proud to have supported Optimal Blue's remarkable transformation and growth over the last few years," said GTCR Managing Director Collin Roche. "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."

Aaron Cohen, Managing Director at GTCR, added: "This transaction marks another successful example of GTCR's Leaders Strategy™. Scott Happ and the entire Optimal Blue team have built a truly remarkable company by investing in people and technology, resulting in accelerated growth and a transformed role within the mortgage industry. On behalf of GTCR, we'd like to extend our thanks and best wishes to the entire management team and employees at Optimal Blue as they continue their journey with Black Knight."

"We'd like to thank GTCR for their commitment and support in transforming Optimal Blue over the past four years," said Scott Happ. "GTCR has been a great partner, and extremely supportive of the investments made to transform the business and drive long-term growth. We look forward to working with Black Knight to continue delivering innovative digital solutions to the ever-evolving mortgage industry."

The transaction is currently expected to close in the third quarter subject to regulatory approval and satisfaction of customary closing conditions.

BofA Securities and Morgan Stanley served as Optimal Blue's financial advisors. Kirkland & Ellis LLP provided legal counsel.

About GTCR

Founded in 1980, GTCR is a leading private equity firm focused on investing in growth companies in the Financial Services & Technology, Healthcare, Technology, Media & Telecommunications and Growth Business Services industries. The Chicago-based firm pioneered The Leaders Strategy™ - finding and partnering with management leaders in core domains to identify, acquire and build market-leading companies through transformational acquisitions and organic growth. Since its inception, GTCR has invested more than $18 billion in over 200 companies. For more information, please visit www.gtcr.com.

About Optimal Blue

Optimal Blue is the leading SaaS mortgage marketplace supporting the industry's largest network of residential mortgage originators and investors. The Company serves more than 3,500 institutions in the secondary mortgage market, with a broad reach across commercial banks, mortgage banks, credit unions, and mortgage brokerage companies. Optimal Blue facilitates approximately $2 trillion of mortgage transactions annually and locks 35% of all mortgages completed nationwide.

Optimal Blue provides a broad set of market functions through its digital marketplace, including real-time price discovery, best execution, workflow automation, risk management, counterparty oversight, and data services. Its solutions suite includes its flagship product pricing engine, its integrated hedging & trading platform, compliance solutions, mortgage insurance distribution, data & analytics, and integrated services with third-party vendors. Optimal Blue focuses on developing innovative products and services across these categories to help mortgage market participants achieve organizational efficiency and success.

The Company recently released Optimal Blue Mortgage Market Indices (OBMMI), which provide the most comprehensive, accurate, timely, and interactive analysis of pricing ever conducted in the mortgage industry. These indices continue gaining adoption and widespread recognition as the most authoritative source of real-time insights into the mortgage market.

Founded in 2002, Optimal Blue is headquartered in Plano, TX with offices in Denver, CO, Appleton, WI, Mequon, WI, and Mission Viejo, CA. Its experienced management team is led by Scott Happ, founder and former CEO of Mortgagebot, a SaaS mortgage loan origination system. In 2016, Optimal Blue was acquired by GTCR, a leading private equity firm based in Chicago.

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SOURCE GTCR