The transaction is valued at nearly $114.7m, with an implied price per share of CFS common stock of $10.49 based on $16.14 closing price of First Merchants’ common stock on 10 May.
Subject to affirmative vote of CFS and First Merchants shareholders, regulatory approvals, and other customary conditions, the transaction is expected to complete in the fourth quarter of 2013. Integration of both businesses will be completed during the first quarter of 2014.
Following the completion of the deal, First Merchants and CFS will have combined assets of $5.4bn with nearly 100 banking offices in 26 Indiana counties, as well as two counties in both Ohio and Illinois.
First Merchants president and chief executive officer Michael Rechin said that Citizens’ markets in Northwest Indiana, and specifically Valparaiso, Merrillville, Schererville, Crown Point and Munster, are similar to Lafayette, Plainfield and Greenwood Indiana markets.
"We believe our partnership will provide our business and consumer customers with broader services, greater access and expanded product offerings, while maintaining our legacy of local community banking," Rechin added.
Citizens’ chief executive officer and president Daryl D. Pomranke, and sales management executive vice president Dale S. Clapp will be executives in First Merchants Banks’ newly acquired market, with Pomranke to serve as regional president.
Sandler O’Neill & Partners served as financial advisor rendered a fairness opinion to First Merchants’ board of directors in this transaction, while Bingham Greenebaum Doll acted as legal advisor.
River Branch Capital served as financial advisor and rendered a fairness opinion to CFS’s board of directors in this transaction, while Vedder Price acted as legal advisor.
