Civista to acquire United Community Bancorp for $26.22 per share
Civista Bancshares (CIVB) and United Community Bancorp (UCBA), the parent company of United Community Bank, announced the signing of a definitive merger agreement pursuant to which Civista will acquire United.
Based on financial data as of December 31, 2017, the combined company would have total assets of $2.1B, total loans of $1.5B and total deposits of $1.7B. United operates an eight branch network in southeastern Indiana, five of which are located in the Cincinnati MSA.
Under the terms of the merger agreement, which has been unanimously approved by the Boards of Directors of both companies, the consideration United shareholders will receive is equivalent to 1.027 shares of Civista common stock and $2.54 in cash per share of United common stock.
This implies a deal value per share of $26.22 or approximately $114.4M based on the 15-day average closing price of Civista’s common stock on March 9, 2018 of $23.06.
Civista and United anticipate that the transaction will qualify as a tax-free reorganization to the extent that United shareholders receive Civista common stock in the merger.
The transaction is expected to close in the third quarter of 2018, subject to each company receiving the required approval of its shareholders, receipt of all required regulatory approvals and fulfillment of other customary closing conditions.
Under terms of the agreement, the directors of Civista and the directors and executive officers of United have agreed to vote all shares that they own in their respective organizations in favor of the merger.
In addition, a total of three existing United directors will join the Civista Bank Board of Directors and two of those directors will join the Civista Bancshares, Inc. Board of Directors. E.G. McLaughlin is expected to be one of the directors to join both boards. In preparation for the merger, extensive due diligence was performed over a multi-week period.
Under the proposed merger terms, the acquisition of United is expected to be immediately accretive to Civista’s earnings in 2018 and thereafter.
In addition, any tangible book value dilution created in the transaction is expected to be earned back in approximately 3.5 years after closing.
Post-closing, Civista’s capital ratios are expected to continue to exceed “well-capitalized” regulatory standards.
“This acquisition will allow Civista to bring its enhanced commercial lending platform to United’s demographically strong markets.
United will provide Civista with low cost core deposit funding and excess liquidity,” the bank stated.
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This article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.