Michigan City, Ind.-based Horizon Bancorp agreed to acquire Attica, Ind.-based , the parent of
CNB Bancorp shareholders will receive cash considerationcomprising a special dividend and an amount to be paid by Horizon equal to 120%of remaining capital. The special dividend is calculated as capital in excessof 8% of CNB Bancorp's total assets, less certain after-tax transaction costs.
The July 12 deal announcement said that these amounts willbe determined as of the end of the month before deal consummation and aredependent on CNB Bancorp's earnings and other factors. But it noted that if thecash consideration for the stockholders were calculated as of March 31, theywould receive, in the aggregate, a $6.7 million special dividend and a $5.3million payment from Horizon.
On anaggregate basis, SNL calculates the deal value to be 108.4% of book andtangible book, and 29.4x last-12-months earnings. The price is 12.02% of depositsand 10.66% of assets, and the tangible book premium to core deposits ratio is0.97%.
Forcomparison, SNL valuations for bank and thrift targets in the Midwest regionbetween July 12, 2015, and July 12, 2016, averaged 132.76% of book, 136.68% oftangible book and had a median of 18.69x LTM earnings, on an aggregate basis.
Through its wholly owned subsidiary Central National Bank,CNB Bancorp serves the Greater Attica area with one full-service branch and onedrive-up location. Horizon Bancorp unit Horizon Bank NA has 50 offices extending across northernand central Indiana and southwestern and central Michigan.
Datacompiled by SNL shows that Horizon Bancorp will enter Fountain County, Ind.,with two branches to be ranked fourth with an 11.96% share of approximately$349.51 million in total market deposits.
CNB Bancorp had total assets of about $55.3 million, whileHorizon Bancorp had total assets of $2.6 billion as of March 31, according tothe release.
The transaction requires regulatory and CNB Bancorpshareholder approvals and is expected to close in the fourth quarter. CentralNational Bank will be merged into Horizon Bank, with the combined operationscontinuing under the Horizon Bank name.
Horizon Bancorp will name Central National Bank Senior VicePresident Sherri McGraw to serve as Horizon's market president.
Horizon Chairman and CEO Craig Dwight said that with themerger, Horizon will be able fill in the gap between its branch locations innorthern and central Indiana.
The law firm of Barnes & Thornburg LLP advised HorizonBancorp in the transaction, while the law firm of SmithAmundsen LLC and theinvestment banking firm Renninger & Associates LLC advised CNB Bancorp.