Lizton, Ind.-basedLizton Financial Corp.agreed to acquireIndianapolis-based Indiana BusinessBancorp ($68.3 million as of Dec. 31, 2015) in a cash deal valued atabout $12.5 million.
According toan April 26 news release, Indiana Business Bancorp shareholders will receive $7.25per share in cash. Indiana Business Bancorp unit Indiana Business Bank will merge with Lizton Financial unitState Bank of Lizton ($362.8million as of Dec. 31, 2015) as part of the transaction, after which the combinedbank will operate as State Bank of Lizton.
On a per-share basis, SNL calculates the deal value to be 104.3%of book and tangible book, and 15.8x last-12-months earnings. The price is 27.68%of deposits and 17.98% of assets, and the tangible book premium-to-core depositsratio is 1.20%.
The one-day premium is 45.00%, based on Indiana Business Bancorp'sApril 25 closing price of $5.00. The one-month premium is also 45.00%, based onIndiana Business Bancorp's March 28 closing price of $5.00.
SNL valuations for bank and thrift targets in the Midwest regionbetween April 26, 2015, and April 26, 2016, averaged 139.26% of book, 147.90% oftangible book and had a median of 19.65x LTM earnings, on a per-share basis.
Subject to theapproval of Indiana Business Bancorp's shareholders and regulators, the deal isslated for completion in the third quarter. Completion of the integration of thecombined financial institution is anticipated to take place in the fourth quarter.The release noted that, based upon current financials, Lizton Financial and IndianaBusiness Bancorp will have combined assets of about $440 million.
Data compiled by SNL shows that Lizton Financial will enter HamiltonCounty, Ind., with one branch to be ranked No. 17 with a 0.79% share of approximately$5.67 billion in total market deposits.
Sandler O'Neill& Partners LP, represented by Jason Hach and Nathan Mittag, and the law firmof Faegre Baker Daniels LLP advised Indiana Business Bancorp, while Renninger &Associates LLC and the law firm of SmithAmundsen LLC advised Lizton Financial.