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Union Bankshares acquiring Access National in $610M all-stock deal

Richmond, Va.-based Union Bankshares Corp. is acquiring Reston, Va.-based Access National Corp. in an all-stock deal valued at approximately $610 million.

The deal value is $29.19 per share, based on the buyer's Oct. 4 closing price of $38.92. Under the deal, each outstanding Access National common share will be converted into the right to receive 0.75 of a Union common share.

The combined company is expected to have $16.0 billion in assets, $11.9 billion in deposits and $11.4 billion in gross loans.

The deal will strengthen Union's presence in Northern Virginia. It is expected to have "meaningful" accretion to Union's earnings per share with "minimal" initial dilution of tangible book value. Earnback period is 2.8 years and internal rate of return is expected to be more than 20%, according to a presentation.

Union expects to book about $32 million in post-tax merger and integration costs. Expense savings, when fully phased-in, are expected to be about $25 million on a pretax basis.

On a per-share basis, SNL calculates the deal to be 139.8% of book value, 243.4% of tangible book value and 22.3x last-12-months earnings.

SNL valuations for bank and thrift targets in the Southeast region between Oct. 5, 2017 and Oct. 5, 2018 averaged 171.62% of book, 189.12% of tangible book and had a median of 25.45x last-12-months earnings, on a per-share basis.

Union Bankshares would expand in Virginia by 15 branches to be ranked seventh with a 3.58% share of approximately $323.05 billion in total market deposits.

The one-day premium is 8.80%, based on Access' closing price of $26.83 as of Oct. 4, and a one-month premium of 7.91%, based on Access' closing price of $27.05 as of Sept. 5.

The deal is expected to close in the first quarter of 2019. Upon closing, Access National President and CEO Michael Clarke will join Union's board and will assist in the integration.

Keefe Bruyette & Woods Inc. is Union's financial adviser, while Covington & Burling LLP is the company's legal adviser. Meanwhile, Sandler O'Neill & Partners LP is Access National's financial adviser, while Troutman Sanders LLP is its legal adviser.

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