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Virginia Community found new partner 9 months after breakup with Atlantic Bay

In August 2018, Virginia Community Bankshares Inc. and Atlantic Bay Mortgage Group LLC mutually decided to withdraw their merger applications and terminate the transaction as the time frame for closing the deal remained unclear.

Following the deal termination, Louisa, Va.-based Virginia Community focused on building value by remaining independent. But it continued to be approached by other financial institutions looking to enter or expand in and around the central Virginia market.

Virginia Community eventually decided to look for a new partner, and by March 22, it had received 10 non-binding indications of interest.

One of those suitors was Luray, Va.-based Blue Ridge Bankshares Inc., whose proposal consisted of mixed consideration with 60% stock and 40% cash. The cash portion of the consideration was fixed at $53.00 per share.

Blue Ridge's bid was one of the top four proposals. All four suitors were asked to submit revised non-binding indications of interest by April 26.

Three of them, including Blue Ridge, continued with the process. Blue Ridge's revised proposal consisted of mixed consideration with 60% stock and 40% cash, with cash consideration of $58.00 per share and a fixed exchange ratio that resulted in an aggregate implied purchase price of $60.68 per share based on the April 26 closing price of Blue Ridge's stock.

Virginia Community ultimately chose to strike a deal with Blue Ridge. They executed the merger agreement May 13 and announced it the following day.

Virginia Community must pay Blue Ridge a $1.5 million termination fee if the deal is terminated by either party under certain circumstances. In addition, Blue Ridge must pay Virginia Community a termination fee of $500,000 and reimburse it for up to $500,000 of reasonable expenses incurred by Virginia Community in connection with the merger if the deal is terminated by Virginia Community under certain circumstances.