Intercontinental Exchange to buy mortgage software provider Ellie Mae

Intercontinental Exchange agreed to buy Ellie Mae, a Pleasanton, Calif.-based provider of mortgage finance software, from Thoma Bravo for $11 billion.

Why it matters: This is the largest acquisition ever for Intercontinental Exchange, as it only spent $8.2 billion to buy the New York Stock Exchange in 2012. It also pushes ICE much further into the mortgage finance market, following smaller deals for MERS (2016) and Simplifile (2019).

• This is a quick and lucrative flip for Thoma Bravo, which last year took Ellie Mae private for $3.75 billion.
• The $11 billion enterprise value is mostly debt. ICE will finance the deal via cash and stock, at an 84%/16% split, with expectations that it closes by year-end.

The bottom line: "Acquiring Ellie Mae would put ICE closer to the origination of home loans, expanding its reach to the mortgage lenders, brokers and other players that come together before a loan is closed. ICE’s current mortgage business is more focused on warehousing and processing data on home loans after they close," writes the Wall Street Journal.