James Barta, Jack Barta and Walter Hoff are looking to purchase 100% of Fullerton, Neb.-based Woodstock Land and Cattle Co., along with its unit Fullerton National Bank.
The group intends to acquire 460.1 common voting shares out of a total 488.1 common voting shares and 4,601 common nonvoting shares out of a total 4,882.0 nonvoting shares. Fullerton National has a total of 1,400 common shares outstanding, all owned by its parent company.
The buyers have also conducted due diligence on the bank and have put $100,000 in escrow pursuant to a deposit escrow agreement. According to an interagency notice of change in control recently obtained by S&P Global Market Intelligence, the buyers consider regulatory approval as the only remaining material condition for the transaction to close.
The total purchase price for the proposed transaction is $7.5 million, with the buyers using cash funds available to them. Of the purchase price, roughly $3.8 million will come from James Barta, approximately $1.9 million will come from Jack Barta and Hoff will contribute another $1.9 million.
On an aggregate basis, SNL calculates the deal value to be 155.8% of book and tangible book and 17.7x last-12-months earnings. The price is 25.03% of deposits and 17.72% of assets, and the tangible book premium to core deposits ratio is 10.97%.
For comparison, SNL valuations for bank and thrift targets in the Midwest region between Aug. 25, 2015, and Aug. 25, 2016, averaged 131.92% of book and 135.41% of tangible book and had a median of 18.22x LTM earnings, on an aggregate basis.
The buyers have also entered into a five-year employment agreement with Fullerton National Bank President and CEO Joseph Wegner, who will keep the 309.10 total common shares (28.1 voting and 281.0 nonvoting) of Woodstock that he already owns. Wegner has also agreed to restrict his shares under a stock agreement after the deal closes. The current managing shareholder of the bank and president and director of Woodstock, Thomas Olson Jr., has a two-year consulting agreement with the buyers.
In addition, the filing indicates that once the transaction is completed, James Barta will become president, treasurer and board member of Woodstock; Hoff will serve as secretary and board member; and Jack Barta will have a seat on the board. Other directors will include Christy Piti and Wegner. James Barta and Hoff will also be among the officers of Fullerton National post-acquisition.
Data compiled by SNL shows that Woodstock Land and Cattle Co. operates one branch in Nance County, Neb., ranked third with a 25.28% share of approximately $126.47 million in total market deposits.
Credit Capital Funding Ltd., represented by Robin Trehan, served as financial adviser to the buyers, while Fraser Stryker Vaughn Meusey, represented by Michael Coyle and Mark Brasee, served as legal counsel.
SNL is an offering of S&P Global Market Intelligence.