Based on the terms of the transaction, the acquirer will issue two million shares of Cullen/Frost common stock and an amount of cash necessary to bring the aggregate consideration to $220m, which can be adjusted up or down based on a targeted book equity value of WNB of $87m at closing.
Additionally, it will provide easy access of Cullen/Frost’s wide array of financial products and services to the customers of WNB. WNB president Jack Wood will join the Cullen/Frost board.
The transaction, which has already been approved by the boards of both firms, is likely to conclude January 2014, after the satisfaction of customary closing conditions, including the approvals of the Federal Reserve and the Texas Department of Banking.
WNB, whose senior management team has agreed to join with Cullen/Frost, was chartered in 1977 and is owned mainly by the Wood Family.
WNB Bancshares manages eight branches through its subsidiary, Western National Bank, primarily in the Midland and Odessa areas of West Texas, with $1.4bn in assets, $1.2bn in deposits and $656m in loans, as of 30 June 2013.
Goldman, Sachs & Co and Sullivan & Cromwell served as financial advisors and legal advisors to Cullen/Frost, respectively. WNB’s financial advisors were Commerce Street Capital, and its legal advisors include Haynie Rake Repass & Lowry, and Atkins, Hollmann, Jones, Peacock, Lewis, & Lyon.
