Despite Ellie’s Mae’s annual revenue rising from an estimated $ 480 million two years ago to $ 900 million now, some worry the company has been riding a wave of home purchases and refinancing that may not last.
The possibility that ICE was overpaying for Ellie Mae sent ICE shares plummeting in after-hours trading and opening trading on Friday.
But a closer look showed the reasons the deal will boost profits, Voigt said. “We clearly like the deal.”
Ellie Mae is owned by a private equity firm, which generally squeezes the costs out of a company before selling it, he said. “But the opposite happened here. They invested in Ellie Mae. “
During a conference call with analysts late Thursday, ICE CEO Jeffrey Sprecher called Ellie Mae “a unique digital platform” that is used on nearly half of the nation’s residential mortgages.
ICE shares rebounded modestly on Friday to end the trading day at $ 100.96 a share, close to an annual high of $ 101.93. During the stock falls triggered by the pandemic earlier this year, ICE fell as low as $ 63.51.
Rosenblatt Securities analyst Kenneth Hill maintained a buy rating on ICE’s stock, setting a target price of $ 104 per share. Others were even more optimistic. Oppenheimer, for example, called ICE a buy with a target of $ 109 per share.
At least for now, Ellie Mae’s 1,700 workers will not join the 1,000 employees ICE has in Atlanta, said ICE spokesman Josh King.
Overall, the company can keep a low profile, but its weight and aggressiveness have had an impact on the region, King said. “We have a large workforce in Atlanta and that has helped spread Atlanta’s fintech expertise and reputation to all of the global capitals.”
And when it comes to making high-risk financial bets, ICE, which has around 6,000 employees around the world, has never been shy. The company has bought a number of financial exchanges, the most famous of which is the New York Stock Exchange in a deal for $ 8.2 billion in 2012. Three years later, ICE bought Interactive Data Corp., a technology platform, for approximately $ 5.2 billion.
ICE bought a majority stake in Mortgage Electronic Registration Systems, in 2016, then the remainder in 2018. It acquired Simplifile, a document registration service, last year.
“They’re so diversified,” said Keefe, Bruyette & Woods analyst Voigt. “There is not a single thing that can divert them from the axis. There is no single thing this company can make or break. “
ICE has been in the news more than usual lately due to the December announcement that Governor Brian Kemp would appoint Kelly Loeffler to fill the position of retired US Senator Johnny Isakson until special elections could be held. Loeffler, who is married to Jeffrey Sprecher, CEO of ICE, worked for ICE for approximately 18 years and was head of investor relations, marketing and communications.
He left the company, but his next Senate run has seen frequent references to his corporate association.
