Simmons First National in Pine Bluff, Ark., and Landmark Community Bank in Collierville, Tenn., tried on three occasions to work out a deal before announcing a $146.3 million merger in early June.
The $23.3 billion-asset Simmons walked away twice, according to a regulatory filing associated the with its proposed acquisition. We’ll look at the details after reviewing the key aspects of the planned merger.
The deal priced the $1 billion-asset Landmark at 143% of its tangible book value. It is expected to close in the fourth quarter. Simmons has a separate deal to buy Triumph Bancshares in Memphis, Tenn., for $131 million.
Simmons expects both deals to be 7.5% accretive to its 2022 earnings per share, excluding merger-related expenses. They should be slightly accretive to tangible book value.
Simmons plans to cut about 40% of the sellers’ combined annual noninterest expenses, while incurring $18.4 million of merger-related expenses.
Now a look at how Simmons-Landmark came together.
- Landmark initially put itself in play in 2018, reaching out to four financial institutions. Simmons was the only one to show an interest and sign a nondisclosure agreement.
- Simmons in March 2019 proposed an all-stock offer valued at $105 million. Landmark countered by asking for more stock and a small cash component to the consideration.
- Simmons ended talks in May 2019 “because it had other larger transactions it was pursuing.”
- Landmark met with a slate of new suitors over the rest of 2019. While a few signed nondisclosure agreements, none made an offer.
- Simmons reached out to Landmark in January 2020, eventually entering into a new nondisclosure agreement. Simmons on Feb. 15 proposed paying 4.3 million shares of stock and $10 million of cash for Landmark.
- The Landmark board approved the letter of intent, but Simmons withdrew it on March 4, “citing the concerns and uncertainty regarding the COVID-19 pandemic as the reason.”
- Simmons contacted Landmark again in January. Conversations proceeded using the nondisclosure agreement that had been signed a year earlier.
- Landmark received a proposal from Simmons on Feb. 12 valued at $130 million with all-cash or all-stock options. Landmark countered, seeking to add $15 million of cash to the stock proposal. Simmons was willing to add $7 million.
- Landmark’s board approved the letter of intent on Feb. 19. The first draft of the merger proposal was circulated in April.
- Landmark’s board approved the merger on May 25. Simmons directors signed off on the agreement on June. 4. The deal was announced on June 7.