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5 Firms Assist Intercontinental Exchange's $11B Ellie Mae Buy

Intercontinental Exchange Inc. has agreed to buy cloud-based mortgage platform Ellie Mae from private equity firm Thoma Bravo for roughly $11 billion, including debt, in a deal guided by five law firms, the companies said on Thursday.

When combined with a couple of previous deals, the acquisition of Ellie Mae makes Intercontinental Exchange the "leading provider of end-to-end electronic workflow solutions" for the U.S. residential mortgage industry, according to a statement. The prior deals are Intercontinental Exchange's 2016 acquisition of a majority stake in MERS, and a 2019 deal for Simplifile. Together, those two companies and Ellie Mae will make up what is called the ICE Mortgage Services network.

Intercontinental Exchange was advised by Shearman & Sterling LLP, Morgan Lewis & Bockius LLP, Potter Anderson & Corroon LLP and Sullivan & Cromwell LLP, while Thoma Bravo and Ellie Mae were counseled by Kirkland & Ellis LLP.

Jeffrey C. Sprecher, founder, chairman and CEO of Intercontinental Exchange, said in the press release that the deal will enable the company to "transform the mortgage marketplace."

"Our planned acquisition represents a one-of-a-kind opportunity to add an extraordinary enterprise with great leadership to our family," Sprecher said. "It will also enhance ICE's growth strategy in mortgage technology, with complementary products and a wide array of customers and stakeholders who will benefit from our core and proven expertise in operating networks and marketplaces."

Formed in 1997 and based in Pleasanton, California, Ellie Mae provides an automated platform called Encompass, which is designed to streamline the mortgage lending process. The company caters to banks, credit units and mortgage companies, and markets itself as a way to improve compliance, quality and efficiency.

For Thoma Bravo, the sale comes only about a year and a half after it took Ellie Mae private. That deal, announced in February 2019, saw the private equity firm pay $3.7 billion to pick up Ellie Mae, which was previously publicly traded.

Holden Spaht, a managing partner at Thoma Bravo, said in the press release that "we are confident that being part of ICE will enable Ellie Mae to continue transforming an industry still in the early innings of digitization, and we look forward to following Ellie Mae's continued success as part of ICE for many years to come."

The agreement is subject to regulatory approvals, among other customary conditions. It is not subject to a financing condition. The companies expect to complete the deal in the third quarter or early in the fourth quarter of this year.

ICE is the owner and operator of 12 regulated exchanges and marketplaces, including the New York Stock Exchange.

Shearman & Sterling LLP is serving as legal adviser to Intercontinental Exchange, with additional legal advice provided by Morgan Lewis & Bockius LLP, Potter Anderson & Corroon LLP and Sullivan & Cromwell LLP.

Credit Suisse, Goldman Sachs and Wells Fargo are serving as lead financial advisers to Intercontinental Exchange, with additional financial advice provided by Broadhaven, Citigroup and Moelis & Co. LLC.

The Shearman & Sterling team includes M&A partners Rory O'Halloran and Cody Wright, finance partner Michael Chernick, capital markets partner Kristina Trauger, intellectual property transactions partner Jordan Altman, compensation, governance and ERISA partner John Cannon, tax partner Nathan Tasso, litigation partner Alan Goudiss, and financial institutions advisory and financial regulatory partners Reena Sahni and Mark Chorazak. 

The Potter Anderson team includes partners Michael B. Tumas, Michael K. Reilly and David B. DiDonato.

Kirkland & Ellis LLP is acting as legal adviser to Thoma Bravo and Ellie Mae, with J.P. Morgan Securities LLC and Jefferies LLC serving as financial advisers.

The Kirkland team was led by corporate partners Gerald Nowak, Ted Peto, Bradley Reed, Peter Stach, Amelia Runyan Davis and associates Christopher Grady, Jake Flood and Daniel Carlomany; tax partners Kevin Coenen and Adam Kool; debt financing partner Brian Ford; technology and intellectual property transactions partners Seth Traxler and Matthew Colman and associate Mannat Sharma; employee benefits partner Matthew Antinossi and associate Emily Morrison; executive compensation partners Michael Falk and Ian Sherwin and associate Brian Valcarce; employment & labor partner Michael Schulman; environmental transactions partner Sara Webber and associate Michael Mahoney; real estate partner John Caruso; government contracts partner Robert Ryland; international trade partner Anthony Rapa and associate Jeremy Iloulian; and antitrust & competition partners James Mutchnik, Chuck Boyars and Sally Evans and associate Chris Boyd.

Alston & Bird LLP is advising Credit Suisse as financial adviser to Intercontinental Exchange, with a team including corporate partners Stuart Rogers and Kevin Miller, plus associate Robyn Downing.