SPOTLIGHT: BIGS GET BIGGER

Each week, we report instances where the money junky hedge funds, private equity groups and the already big companies swallow another piece of the global economy. Here are some more of what the BIGS have been gobbling up and how the Bigs keep getting bigger and the rich keep getting richer.

ICE BUYS MORTGAGE DATA FIRM FOR $13.1 BILLION

Atlanta-based Intercontinental Exchange (ICE), which provides online platforms and data for financial services and also owns the New York Stock Exchange, has agreed to buy mortgage data service Black Knight for about $13.1 billion.

The deal is pegged at $85 a share for Black Knight, a 35-percent premium to the stock’s price before news of the sale was made public.

The deal attributes a value of about $16 billion to Black Knight.

ICE’s purchase leads it further into the mortgage industry, diversifying it away from its emphasis in recent years on owning stock and futures exchanges. 

ICE bought NYSE Euronext for $11 billion in 2013, Interactive Data Corp. for $5.2 billion in 2015, and the Chicago Stock Exchange in 2018. 

Then in 2020, the company paid $11 billion for Ellie Mae, a mortgage software company.

Mortgage-related technologies brought ICE about a fifth of its $7.1 billion in revenue last year.

The new acquisition fits with ICE’s business model of turning conventional financial services into more profitable, tech-based operations, CEO Jeffrey Sprecher said in a statement announcing the takeover.

SHOPIFY BUYS DELIVERR FOR $2.1 BILLION

Shopify, the Canadian company providing e-commerce platforms to retailers, is spending $2.1 billion to take over fulfillment company Deliverr.

Shopify will combine Deliverr with its existing fulfillment operation, which includes 6 River Systems, a fulfillment firm it paid $450 million for in 2019.

Deliverr’s software and systems will give Shopify better control of logistics and supply chains, the company said in a statement announcing the purchase.

The deal is expected to make Shopify’s clients better able to compete with Amazon. 

With the acquisition, Shopify “will accelerate its roadmap by assembling an end-to-end logistics platform from port to porch and across all sales channels,” CFO Amy Shapero said in the statement.

The deal comes as online commerce has slowed after COVID-era lockdowns ended and government stimulus checks to households dried up.

With people returning to brick-and-mortar stores post-COVID, online retailers are seeing a declining share of sales. Amazon recently reported its digital sales have flattened.

That trend, combined with weakening fundamentals in the tech sector, have sent Shopify’s share price down 70 percent so far this year.