In Missouri, Enterprise Financial Services Corp is acquiringJefferson County BancsharesInc. for approximately $130.6 million in cash and stock.
The consideration will be made up of 3.3 million Enterpriseshares and about $26.6 million in cash. The target's shareholderscan elect to exchange each Jefferson County share held for $85.39 or 2.75Enterprise common shares. The deal is expected to close in early 2017.
On anaggregate basis, SNL calculates the deal value to be 134.4% of book and 146.1%of tangible book, and 19.8x last-12-months earnings. The price is 17.09% of depositsand 14.11% of assets, and the tangible book premium to core deposits ratio is5.98%.
Forcomparison, SNL valuations for bank and thrift targets in the Midwest regionbetween Oct. 11, 2015, and Oct. 11, 2016, averaged 132.71% of book, 136.27% oftangible book and had a median of 18.22x LTM earnings, on an aggregatebasis.
Enterprise expects to record merger-related charges of about$10 million pretax, but to reach cost-saves of $8.0 million, before taxes, whenthe acquisition is fully phased in. The deal will likely be accretive to EPS in2017, not counting the one-time charges, while 2018 EPS accretion is estimatedat 19 cents per share. Tangible book value could be diluted by 3.6%, but theearnback period is projected to be less than 3.25 years.
Enterprise and Jefferson County are the parent companies ofSt. Louis-based Enterprise Bank& Trust ($3.74 billion) and Hillsboro, Mo.-based ($927.7 million), respectively.
Datacompiled by SNL shows that Enterprise Financial Services Corp will expand inMissouri by 18 branches to be ranked eighth with a 1.87% share of approximately$165.98 billion in total market deposits.
Under the agreement, a Jefferson County director will benamed to Enterprise's board, and Jefferson County Chairman and CEO MichaelWalsh will join Enterprise Bank & Trust as director, executive vicepresident and chairman of the St. Louis region.
Sandler O'Neill & Partners LP and Reed Smith LLP actedas Enterprise's financial adviser and legal counsel, respectively. KeefeBruyette and Woods Inc. and Lewis Rice LLC served in those roles for JeffersonCounty Bancshares.