American financial services company WesBanco has agreed to merge with Premier Bank, a fully owned subsidiary of Premier Financial (PFC), in a stock-for-stock deal worth nearly $987m.
According to the terms of the definitive merger agreement, shareholders of Premier Financial will receive 0.80 shares of WesBanco common stock for each share of Premier Financial common stock.
The transaction is valued at approximately $27.42 per common share of Premier Financial, based on WesBanco’s closing price of $34.28 as of 25 July 2024.
To support the merger, WesBanco has signed subscription agreements with investors to raise capital. It is led by a $125m investment from Wellington Management.
Other investors include Glendon Capital Management and Klaros Capital. In total, $200m of WesBanco common stock will be issued.
Following the closing of the deal, Premier Financial shareholders will own around 30% of the newly combined company while WesBanco shareholders will hold 62%. The remaining 8% represents the shares issued in the capital raise.
Premier Financial president and CEO Gary Small said: “The combination of WesBanco and Premier makes for an excellent strategic fit. Both organisations value community-level banking, are well-aligned from a culture perspective, and are focused on performance.
“The expanded reach of the organisation will serve as a catalyst for growth and increased investment in products and services, to the benefit of all stakeholders: customers, associates, shareholders, as well as the communities we serve.”
The merger is expected to create a regional financial services institution with about $27bn in assets, strong economies of scale, and robust pro forma profitability metrics.
Upon completion of the transaction, WesBanco will operate over 250 financial centres and loan production offices across nine US states. The merger is said to expand WesBanco’s presence with 73 additional financial centres.
WesBanco president and CEO Jeff Jackson said: “This transformative merger will bring together two high-calibre institutions to create a community-focused, regional financial services partner strongly positioned to serve the unique needs of both our new and legacy communities.
“We are pleased to welcome Premier’s customers and employees to the WesBanco family and look forward to delivering exceptional customer experiences to our newest markets through a broader offering of banking and wealth management services.”
Subject to the approval of shareholders of both Premier Financial and WesBanco and regulatory approvals along with other customary conditions, the transaction is expected to be closed in Q1 2025.
Premier Financial also posted a net income of $16.2m or $0.45 per diluted common share, for the second quarter of 2024, compared to an income of $48.4m or $1.35 per diluted common share for the same period of the previous year.
