Veritex Holdings in Dallas has agreed to buy North Avenue Capital in Ponte Vedra, Fla.
The $9.3 billion-asset Veritex said in a press release Tuesday that it will pay $57.5 million in cash for the government-guaranteed lender. Three years after the deal closes, North Avenue has the right, subject to adjustment, to receive another $5 million in cash, subject to certain performance measures.
The deal is expected to close in the fourth quarter.
Veritex said the acquisition will make it a leading player in the Department of Agriculture’s Business and Industry lending program.
“We have been interested in expanding our existing presence in the USDA lending space for a while now and we have been impressed by what we have learned about North Avenue Capital and its people,” Malcolm Holland, Veritex’s chairman and CEO, said in the release.
“This transaction provides us the opportunity to become the top player in the USDA B&I lending space,” Holland added.
North Avenue will continue to operate under its name and brand after the deal closes.
The deal is expected to be 8.1% accretive to Veritex’s 2022 earnings per share. It should take a little more than three years for the company to earn back an estimated 4.3% dilution to its tangible book value.
Veritex was advised by Keefe, Bruyette & Woods and Covington & Burling. North Avenue was advised by Harbor View Advisors and Womble Bond Dickinson.