The Bank Slate


Six bidders made offers for North Carolina’s Aquesta

Aquesta Financial Holdings in Cornelius, N.C., received offers from six bidders when it looked to sell itself earlier this year.

The $18.6 billion-asset United Community Banks in Blairsville, Ga., would walk away with the deal for the $752 million-asset Aquesta on May 27.

First, here’s a look at the financial details of the $131 million transaction, which is expected to close by the end of this year.

The cash-and-stock transaction values Aquesta at 216.8% of its tangible book value.

United said the deal should be accretive to its earnings per share by 6 cents to 9 cents in 2022, depending on the final mix of consideration. The company expects “manageable” dilution to its tangible book value.

United plans to cut 38% of Aquesta’s annual noninterest expense, or roughly $7.3 million. The company expects to incur $11.1 million of merger-related expenses.

Now for the highlights, per a regulatory filing tied to the proposed acquisition:

  • Aquesta’s board decided during an October 2020 retreat that selling to a larger institution “might prove to be the best strategic option to enhance stockholder value.”
  • Aquesta’s investment bank identified 31 potential buyers. Nineteen were contacted in the first half of March, and a dozen, including United, signed nondisclosure agreements to access confidential information.
  • Six institutions, including United, submitted written nonbinding indications of interest by a March 30 deadline. The offers ranged from $16 to $21 a share. Four contenders were invited to conduct more due diligence.
  • Each bidder was given an draft agreement and plan of merger on April 21, with a request that each mark up the document and submit their best offers by May 7.
  • The second round of offers ranged from $19 to $21.25 a share. Aquesta took into account each bidder’s common stock, including price, trading volume, analyst estimates and dividend yield.
  • The board determined that United’s bid – consisting of at least 70% stock, a fixed exchange ratio and a value of $21.25 a share – provided the best value for shareholders.
  • On May 11, a suitor indicated it would raise its bid to $21.50 a share in cash and stock. After Aquesta pressed United and the other institution to submit their final and best offer, the other bidder increased its offer to $21.75 a share.
  • United increased the stock portion of its bid and included $21.50 a share in cash.
  • After analyzing both offers and each bidder, Aquesta entered into exclusive negotiations with United on May 12. A draft of the merger agreement was circulated soon after that.
  • Aquesta on May 25 approved a deal with a total value of $21.28 a share. The agreement was executed on May 26 and announced the next day.

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