Baton Rouge, La.-based Business First Bancshares Inc. is buying Minden, La.-based Minden Bancorp Inc. and unit MBL Bank in a deal valued at approximately $76.1 million.
Under the deal, Minden shareholders will receive $31.50 in cash for each common share held. The per-share consideration, however, may be reduced on a dollar-for-dollar basis by any special dividend paid by Minden immediately prior to the deal's completion.
On a per-share basis, SNL calculates the deal value to be 156.7% of book and tangible book, and 14.5x earnings. The price is 29.42% of deposits, 23.61% of assets and the tangible book premium-to-core deposits ratio is 13.46%.
The one-day premium is 21.15%, based on Minden Bancorp's closing price of $26.00 as of Oct. 5. The one-month premium is 12.5%, based on Minden Bancorp's closing price of $28.00 as of Sept. 6.
SNL valuations for bank and thrift targets in the Southwest region between Oct. 6, 2016, and Oct. 6, 2017, averaged 158.74% of book, 175.05% of tangible book and had a median of 19.96x last-12-months earnings, on an aggregate basis.
The combined company will have more than $1.5 billion in assets and will become the ninth-largest bank based in Louisiana.
As of June 30, Business First had $1.17 billion in assets, according to SNL data. Meanwhile, Minden had $322.9 million in assets, $194.4 million in loans, $259.1 million in deposits and $48.6 million in equity. For the first six months of 2017, the company reported net income of $2.8 million, return on average assets of 1.7%, return on average equity of 11.7% and an efficiency ratio of 35.8%.
MBL Bank has two branches in Minden, La., while Business First has one branch in Shreveport, La. On a pro forma basis, the combined company will rank seventh in deposit market share for the Shreveport-Bossier City Metropolitan Statistical Area.
SNL data shows that Business First Bancshares will expand in Webster County, La., by two branches to be ranked first with a 39.97% share of about $648.3 million in total market deposits.
Upon deal completion, Minden Chairman, President and CEO Jack Byrd Jr. will join the boards of Business First and unit Business First Bank. He will serve as chairman of Business First's Northwest region.
The deal is subject to regulatory and Minden shareholders' approval. It is expected to close in the first quarter of 2018.
Stephens Inc. and National Capital LLC served as financial advisers to Business First, while Fenimore Kay Harrison & Ford LLP served as legal adviser. Banks Street Partners acted as financial adviser and rendered a fairness opinion to Minden, while Phelps Dunbar LLP acted as the company's legal adviser.
In connection with the pending merger, Business First also executed a private placement of 3.3 million common shares with selected institutional investors. The shares will be offered at $20 apiece for an aggregate gross proceeds of $66 million. The proceeds will be used to pay the cash consideration of the Minden deal, to support capitalization of the combined company and other general corporate purposes.
Stephens Inc. also acted as the sole placement agent for the offering.
SNL is an offering of S&P Global Market Intelligence.