German American Bancorp in Jasper, Ind., has agreed to buy Heartland BancCorp in Whitehall, Ohio.
The $6.2 billion-asset German American said in a press release that it will pay $330.2 million in stock for the $1.9 billion-asset Heartland. The deal, which is expected to close in the first quarter, priced Heartland at 202% of its tangible book value.
Heartland has 20 branches, $1.5 billion of total loans and $1.6 billion of total deposits. It will initially operate under its own name as part of a cobranding initiative.
“This strategic partnership will bring together two high-performing, community-oriented organizations and expand German American’s footprint into Columbus and Cincinnati, Ohio, two of the most vibrant and fastest-growing markets in the Midwest,” D. Neil Dauby, German American’s chairman and CEO, said in the release.
“We expect this strategic transaction will be materially accretive to German American’s earnings per share during the 12 months following completion of the transaction with a relatively quick tangible book value earn back period,” he added.
G. Scott McComb, Heartland’s chairman, president and CEO is expected to join the German American board. Members of the Heartland executive and senior teams are expected to stay on as regional management. McComb and one other Heartland director will join German American’s board.
The deal is expected to be 20% accretive to German American’s 2025 earnings per share when including cost savings. It should take about three years to earn back an estimated 14% dilution to German American’s tangible book value.
German American expects to incur $19.5 million of merger-related charges. It plans to cut roughly 30% of Heartland’s annual operating expenses.
Keefe, Bruyette & Woods and Dentons Bingham Greenebaum advised German American. Raymond James and Hunton Andrews Kurth advised Heartland.