Low stock price spurred Black Knight deal

“Sophisticated companies” saw value in the company, CEO Anthony Jabbour says.


  • By Mark Basch
  • | 5:00 a.m. May 12, 2022
  • | 5 Free Articles Remaining!
The Black Knight headquarters campus at 601 Riverside Ave.
The Black Knight headquarters campus at 601 Riverside Ave.
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As CEO Anthony Jabbour saw it, Wall Street was not properly recognizing the value of Black Knight Inc.

That made the Jacksonville-based mortgage technology company a natural target for acquisition.

“We have been delivering consistently strong results,” Jabbour said in a May 6 quarterly conference call scheduled before Black Knight agreed to a $13.1 billion buyout by Intercontinental Exchange Inc.

“Our stock has not reflected that performance, so it’s not surprising that sophisticated companies that have a deep understanding of our industry, like ICE, realized the value in Black Knight and are interested in acquiring a great company,” Jabbour said.

In a May 5 town hall meeting with Black Knight employees, Jabbour said the market treats Black Knight like a company that makes mortgage loans rather than as a company that provides technology for those lenders.

“If you look at all mortgage companies, when rates are low, their value is high. When rates are high, their value is low,” Jabbour told employees, according to a transcript of the meeting posted by the company.

“We really get caught up in that, even though we’ve proven consistently that our financial performance is less dependent on rates than a traditional mortgage company,” he said.

ICE’s $85-a-share buyout offer was 43% higher than Black Knight’s market price April 4, the day before Bloomberg News reported that Black Knight was in negotiations with potential suitors.

Although it’s too early to detail potential changes to Black Knight’s operations after the buyout, which is expected to be completed in early 2023, Jabbour reiterated comments from Atlanta-based ICE officials that the company plans to keep its Jacksonville offices on Riverside Avenue.

“They’re interested in Jacksonville and the campus that we had,” he said.

“Their president really wants to lease space from us in our building.”

Black Knight employs about 6,500 people, including more than 2,000 in Jacksonville, and Jabbour said there will be some impact on jobs.

“There most likely will be layoffs and jobs that go away,” he said.

But he added: “I think there’s going to be a creation of new jobs and new opportunities.”

FIS earnings up 11% in the first quarter

Another company headquartered on the Riverside Avenue campus, Fidelity National Information Services Inc., reported first-quarter adjusted earnings rose 11% to $904 million, or $1.47 a share, with revenue rising 8% to $3.49 billion.

 “We chose to continue to invest in new solutions and capabilities to benefit our clients throughout the pandemic. These investments are really paying off by enabling us to drive strong revenue growth and returns,” CEO Gary Norcross said in a May 3 news release.

Black Knight’s main business once was part of FIS, but the banking technology firm spun it off as a separate company in 2006.

Regency sees positive trends

While the business climate is posing challenges for retailers, Jacksonville-based shopping center operator Regency Centers Corp. is seeing positive trends for its business.

“We do see and acknowledge the risks of inflation and continued supply chain challenges and labor shortages on our business,” CEO Lisa Palmer said in Regency’s May 4 conference call.

“But so far we, and importantly our tenants, have largely been able to mitigate the impacts,” she said.

Regency reported first-quarter funds from operations (basically earnings excluding noncash charges) of $1.03 a share, up from 90 cents the previous year.

With the positive outlook, Regency also raised its FFO forecast for all of 2022 from a range of $3.72 to $3.80 a share to $3.84 to $3.90.

The company’s portfolio of 406 properties across the country, mainly grocery-anchored shopping centers, was 93.9% leased as of March 31.

Regency is optimistic about a Jacksonville property under development, the East San Marco center anchored by a Publix supermarket scheduled to open this summer.

“Even before delivering the anchor space, we are nearly 100% leased today, with only one shop space remaining,” Chief Operating Officer Jim Thompson said in the conference call.

“This project is a great example of the leasing demand we are seeing for new grocery-anchored centers in top trade areas,” he said.

Rayonier AM becoming RYAM

As Rayonier Advanced Materials Inc. struggles to return to profitability, CEO Vito Consiglio announced a new branding initiative for the Jacksonville-based maker of specialty materials.

“Going forward, we will refer to the company as RYAM (pronounced ‘rye-um’) to distinguish and simplify our image,” he said.

The company split up from Rayonier Inc. in 2014 and the new brand will further separate the companies. The company’s ticker symbol is RYAM, and analysts commonly refer to the company by that moniker.

Consiglio said in a conference call the new brand represents a new vision for the company.

“With our unique biorefinery assets and sustainable business model, we’re embarking on a new journey into the bio-future, applying science to nature,” he said.

RYAM reported a first-quarter net loss of $25 million, or 39 cents a share, following three straight years of losses from continuing operations.

Rayonier Inc. increases earnings

Rayonier Inc. reported first-quarter earnings more than doubled to $29.3 million, or 20 cents a share, with both its timber and real estate businesses increasing earnings.

Revenue rose 16% to $222 million.

“Favorable results in our Southern timber, Pacific Northwest timber and real estate segments more than offset lower adjusted EBITDA in our New Zealand timber segment,” CEO David Nunes said in a May 4 news release.

Firehouse Subs sales rise 7.4%

Sales at Firehouse Subs restaurants rose 7.4% to $272 million in the first quarter, with sales at stores open for more than one year growing by 4.2%, Restaurant Brands International Inc. reported May 3.

Toronto-based RBI acquired Jacksonville-based Firehouse Restaurant Group Inc. for $1 billion in December.

“I’m delighted to see the brand integrating smoothly into RBI,” Chief Executive Jose Cil said in RBI’s quarterly conference call.

“In just a short amount of time, we’ve made good initial progress towards accelerating development in many geographies around the world, and have begun to assess where we can help enhance the brand’s already strong digital capabilities,” he said.

RBI, which also operates the Burger King, Tim Hortons and Popeyes chains, said total sales at its restaurants grew 12.9% in the quarter to $9 billion.

Treace increases sales projection

Treace Medical Concepts Inc. said May 5 that first-quarter revenue jumped 55% to $29 million, as it expanded the customer base for its bunion surgery products and slightly increased prices.

Ponte Vedra-based Treace, which went public last year, also increased its sales projections for the full year.

After previously forecasting revenue of $125 million to $130 million, it now expects $128 million to $133 million this year, which would be 36% to 41% higher than 2021.

Stone Point Capital acquires majority stake in Beeline

Jacksonville-based Beeline said May 3 that funds managed by Connecticut-based Stone Point Capital acquired a majority stake in the company, which provides workforce management software solutions.

New Mountain Capital will remain a minority investor in the company. New Mountain acquired Beeline from Adecco Group in 2018.

Terms of the deal were not announced.

Advancing Eyecare agrees to buyout

Private equity firm Cornell Capital LLC said May 9 it agreed to acquire Advancing Eyecare, a Jacksonville-based provider of ophthalmic instruments.

Terms of the agreement were not disclosed.

Advancing Eyecare was formed by private equity firm Atlantic Street Capital in 2019 when it acquired a majority interest in Jacksonville-based Marco Ophthalmic Inc. and merged it with another eye care equipment company it owned called Lombart Instrument.

Investment funds acquire Florachem

SK Capital Partners announced May 2 that funds affiliated with the firm acquired Jacksonville-based Florachem Holdings LLC.

Florichem, founded in 1988, makes plant-based ingredients including citrus, pine, and specialty rosin resins.

New York-based SK Capital is a private investment firm focused on the specialty materials, specialty chemicals and pharmaceutical sectors.

The funds acquired Florichem from an affiliate of Los Angeles-based Carmelina Capital Partners.

Terms of the deal were not announced.

 

 

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