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Cadence to acquire State Bank
Posted on Monday, 14 May 2018 13:25
Cadence Bancorporation and State Bank Financial have reached an agreement they are describing as a merger in a stock-for-stock transaction valuing the deal at USD 1.40 billion.
The former will pay 1.16 shares of its class A common stock for each held in the latter, with investors in each firm expected to hold 65.0 per cent (Cadence) and 35.0 per cent (State Bank), respectively.
Combined, the businesses will have USD 16.00 billion in assets, USD 12.00 billion in loans, USD 13.00 billion in deposits and about 100 branches in Texas, Florida and Mississippi, among other markets.
Reuters observed the transaction could be a sign of a rise in consolidation of banks in the US as investors are expecting a wave of mergers among mid-sized lenders.
Subject to shareholder and regulatory approvals, closing is slated for the fourth quarter of 2018.
Cadence is expecting the acquisition to boost earnings per share by 2020, as well as delivering strong returns on capital.
The deal may produce about 4.0 per cent tangible book value per share dilution at closing with an earn-back period of less than three years.
Sam Tortorici, chief executive of Cadence, said: “State Bank brings a significant Georgia presence, which will be an important part of our combined company.
“[…] We will work together to ensure our future success in Georgia and as a leading regional banking franchise.”
Following the announcement, State Bank also issued its financial results for the first quarter of 2018, whereby the company recorded a net income of USD 17.40 million, or USD 44.00 per diluted share.
The group had total assets of USD 4.89 billion at 31st March 2018, with total loans of USD 3.60 billion and total deposits of USD 4.20 billion on the same date.
According to Zephyr, the M&A database published by Bureau van Dijk, there have been 114 deals targeting US-based commercial banking companies signed off since the start of 2018.
The largest transaction involved Citizens Business Bank agreeing to acquire Community Bank for USD 878.60 million.
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