In Illinois, Moline-based bank QCR Holdings Inc. is acquiring Rockford-based Bates Cos., which includes Bates Financial Advisors Inc., Bates Securities Inc., Bates Financial Services Inc. and Bates Financial Group Inc.
QCR will pay $3 million in cash and up to $3 million of its common stock in the transaction and will merge the acquired entities into Rockford Bank and Trust Co.'s wealth management unit. Rockford had $461.7 million in assets at the end of 2017, according to S&P Global Market Intelligence data. Bates Cos. had approximately $700 million in assets under management at that time.
The deal, which is still subject to regulatory approvals, is expected to close late in the second quarter or early in the third. Bates Cos. President George Bates will stay on in his role after the merger.
QCR is also planning a private placement of about 21,528 common shares upon the merger's completion. If the merger's total stock consideration reaches $3 million, QCR may issue a total of 64,583 common shares, based on its current stock price.
In the first full year following the acquisition, the transaction is projected to be 0.3% accretive to EPS, excluding the impact of future consideration. The internal rate of return is anticipated to be higher than 15%.
Piper Jaffray & Co. and Barack Ferrazzano Kirschbaum & Nagelberg LLP served as QCR's financial adviser and legal counsel, respectively. For Bates Cos., DeWitt Ross & Stevens SC was legal counsel.