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National Commerce beats 2 others for FirstAtlantic deal

Executives of Birmingham, Ala.-based National Commerce Corp. and Jacksonville, Fla.-based FirstAtlantic Financial Holdings Inc. first met in April 2016, but it wasn't until a year later that the two companies started talks of a potential merger.

In late February, FirstAtlantic President and CEO Mitchell Hunt was in contact with representatives of Companies B and C to discuss the possibility of a merger, with FirstAtlantic discussing a merger of equals with Company C.

FirstAtlantic was also looking to acquire Company A in March but FirstAtlantic lost its bid and discussions were discontinued. Around this time, the merits of the aforementioned merger of equals were also being evaluated.

In April, FirstAtlantic's board concluded that organic growth will not provide the appropriate shareholder value and had reached out to National Commerce and Company B to solicit potential valuations.

In mid-May, Company B and National Commerce provided their valuations of FirstAtlantic, with National Commerce's range of value deemed the superior of the two. In late May, National Commerce executives proposed a cash-and-stock deal — for each FirstAtlantic share, National Commerce would exchange $17.00 in cash, for 10% to 15% of the aggregate purchase price, or 0.44 National Commerce share, for the remaining 85% to 90% of the aggregate purchase price.

In July, Hunt informed Company C that the FirstAtlantic board did not view a merger of equals to be in the best interest of its shareholders. FirstAtlantic then continued talks with National Commerce, requesting to increase the cash component of their proposed valuation. National Commerce said that it was willing to increase the cash consideration to $17.25 for each FirstAtlantic share.

Negotiations of the deal continued and in Aug. 16, the two companies publicly announced the deal.