The $3.3 billion-asset Old Second said in a press release Monday
that it will pay $297 million in cash and stock for the $3 billion-asset West
Suburban. The deal, which is expected to close in the fourth quarter, priced
West Suburban at 122% of its tangible book value.
West Suburban has 43 branches, $1.5 billion of loans and $2.6
billion of deposits.
“West Suburban is a franchise we have known and respected for a
very long time,” James Eccher, Old Second’s president and CEO, said in the
release.
“This combination is expected to significantly enhance our
financial strength, our position in Chicago and our ability to invest in
building the best bank for our customers and communities,” Eccher added. “From
our perspective, we do not believe there is another partner who could deliver
us the same level of complementary geographic reach, scale on current products
and services, upside and long-term shareholder value.”
The deal is expected to be 38% accretive to Old Second’s earnings
per share in the first year of combined operations. It should take about five
years for Old Second to earn back an estimated 18% dilution to its tangible book
value.
Old Second plans to cut 37% of West Suburban’s annual noninterest
expenses. The company expects to incur $31 million in merger-related expenses.
Citigroup Global Markets and Nelson Mullins Riley &
Scarborough advised Old Second. Keefe, Bruyette & Woods, Kirkland &
Ellis and Barack Ferrazzano advised West Suburban.
No comments:
Post a Comment