New Mexico-based Trinity Capital Corp. on Sept. 26 received nonbinding indications of interest from Missouri-based Enterprise Financial Services Corp and two other parties.
Enterprise proposed to acquire Trinity for $12.25 per Trinity common share, with the consideration to consist of up to 15% cash with the remainder in Enterprise common shares.
A competing proposal for Trinity contemplated consideration of $12.35 per Trinity common share in an approximately 85%-stock and 15%-cash deal, and another offer represented $10.85 per Trinity common share in an all-stock transaction.
Each of the three suitors requested that Trinity enter into an exclusivity agreement.
A Trinity special committee considered, among other things, the implied purchase price of each offer, the opportunities of the resulting company and the likelihood of consummating a business combination on a timely basis.
The committee determined that the proposals submitted by Enterprise's rivals were insufficient to move forward with an exclusive arrangement and recommended to the Trinity board that Trinity seek an improved purchase price from Enterprise in exchange for exclusivity.
Enterprise on Oct. 4 sent a revised offer, proposing to buy Trinity for $12.30 per Trinity common share, with the consideration to consist of up to 15% cash with the remainder in Enterprise common stock at a fixed exchange ratio of 0.1972 share of Enterprise common stock for each Trinity common share.
The following day, Trinity and Enterprise executed an exclusivity agreement.
The deal process continued, and the two companies executed the merger agreement Nov. 1.
If the deal is terminated in certain circumstances, Trinity could be required to pay a termination fee of $9.5 million to Enterprise. If the agreement is terminated upon a material breach, the breaching party may be required to pay a liquidated damages fee of $2 million.