Champaign, Ill.-based First Busey Corp. entered into a definitive agreement to acquire Glenview, Ill.-based Cummins-American Corp. for an aggregate transaction value of approximately $190.8 million.
Under the terms of the agreement, Cummins-American shareholders will have the right to receive 444.4783 First Busey common shares and $27,969.67 in cash for each common share of Cummins-American, with total consideration to consist of roughly 73% cash and 27% stock. Based upon the Jan. 15 closing price of First Busey's common stock of $23.54, the implied purchase price is $38,432.69 per share.
S&P Global Market Intelligence calculates the deal value to be 109.65% of common equity and tangible common equity and 21.61x earnings. The deal value is also 13.67% of assets and 25.28% of core deposits, and the tangible book premium to core deposits ratio is 1.53%.
S&P Global Market Intelligence valuations for bank and thrift targets in the Midwest region between Jan. 19, 2020, and Jan. 19, 2021, averaged 130.56% of book and 135.48% of tangible book and had a median of 23.53x last-12-months earnings, on an aggregate basis.
The transaction is expected to close in the second quarter.
It is anticipated that Cummins-American unit Glenview State Bank will be merged with and into First Busey unit Busey Bank at a date following the completion of the merger. Glenview State Bank banking centers will become branches of Busey Bank.
The combined pro forma franchise will serve customers through more than 70 full-service locations, including 60 branches across Illinois, as well as 10 in Missouri, four in Florida and one in Indiana. It will have combined assets of $11.9 billion, $7.6 billion in gross loans, $9.8 billion in deposits and more than $10.6 billion in wealth assets under management, according to a First Busey press release.
With the deal, First Busey will enter Cook County, Ill., with seven branches to be ranked No. 24 with a 0.29% share of about $413.06 billion in total market deposits, based on S&P Global Market Intelligence data.
Cummins-American will pay First Busey $8 million if the agreement is terminated under certain circumstances, according to a filing.
Vedder Price PC served as legal counsel and Stephens Inc. served as financial adviser to First Busey. Barack Ferrazzano Kirschbaum & Nagelberg LLP served as legal counsel and Piper Sandler & Co. served as financial adviser to Cummins-American.