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.