Carmel, Ind.-based Merchants Bancorp expects to price its IPO of 5,555,555 common shares between $17.00 and $19.00 per share.
Underwriters will have the option to buy an additional 833,333 shares. If the IPO prices at the $18.00 midpoint, net proceeds are estimated at $92.2 million, or $106.3 million if the overallotment option is exercised in full.
Chairman and CEO Michael Petrie and President and COO Randall Rogers, along with their families, collectively own approximately 93% of Merchants. After the IPO closes, their aggregate stake will fall to 73.97%.
About $5.8 million of the IPO proceeds will go toward Merchants' pending acquisition of Joy, Ill.-based Joy State Bank. The regulatory filing noted that the October 2016 deal agreement was amended in December of that year to name Petrie and Rogers as the acquirers, as Merchants' capital position made regulatory approval uncertain. Merchants has since raised capital.
Petrie and Rogers closed their acquisition of Joy on April 3. They then entered into a stock purchase agreement with Merchants for Joy, valuing the latter at approximately $5.4 million, plus $16,403 for each 30 days after June 30, prorated to the closing date. The purchase price is equal to that paid by Petrie and Rogers, plus expenses and a cost of funds equal to 3.75%.
The Federal Reserve Bank of Chicago has approved the Merchants-Joy merger. State regulatory approval has yet to be secured.
The parties expect to close the deal in the first quarter of 2018.