Simmons First National Corporation entered into a definitive agreement to acquire First Texas BHC, Inc. for approximately $500 million.
January 22, 2017
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Simmons First National Corporation (NasdaqGS:SFNC) entered into a definitive agreement to acquire First Texas BHC, Inc. for approximately $500 million on January 23, 2017. Simmons First National Corporation will pay $70 million in cash and issue 6.5 million shares of its common stock as consideration. On completion, First Texas BHC will merge into Simmons First National Corporation to form a single entity. In case of termination, a termination fee of $18 million will be payable by First Texas BHC to Simmons First National Corporation.
The purchase price represents a multiple of approximately 2 times 2016 book value and 2.4 times 2016 tangible book value. As of September 30, 2016, Southwest Bank, the wholly owned bank subsidiary of First Texas BHC, reported total assets of approximately $2.02 billion. On completion, the Directors of Simmons First National Corporation shall serve as the Directors of the combined entity and the officers of Simmons First National Corporation shall serve as the officers of the combined entity.
The Board of Directors of First Texas BHC adopted a resolution and the Board of Directors of Simmons First National Corporation approved the transaction. The transaction is subject to approval by the shareholders of Simmons First National Corporation and First Texas BHC, receipt of required regulatory approvals, approval of the listing on the Nasdaq Global Select Market of Simmons First National Corporation's common stock to be issued, the effectiveness of the registration statement for the Simmons First National Corporation’s common stock to be issued and certain other additional customary conditions. The Board of Governors of the Federal Reserve System had approved the acquisition on August 25, 2017. The transaction is expected to close during the third quarter of 2017. As of August 29, 2017, the transaction is expected to close during the fourth quarter of 2017. The transaction is expected to be accretive to earnings per share of Simmons First National Corporation within the first full year.
Rusty Conner, Michael Reed, Matt Wood, Nora Diamond-Jones, Frank M. Conner III and Michael P. Reed of Covington & Burling LLP acted as legal advisors for Simmons First National Corporation. Chet A. Fenimore of Fenimore, Kay, Harrison & Ford, LLP acted as legal advisor and Stephens Inc. acted as financial advisor for First Texas BHC. Jeff Davis and Andy Gibbs Mercer Capital Management, Inc. acted as financial advisors to Simmons.
Simmons First National Corporation is a financial holding company. The Company, through its subsidiary, Simmons Bank (the Bank), provides banking and other financial products and services in markets located in Arkansas, Kansas, Missouri, Oklahoma, Tennessee, and Texas. It offers commercial banking products and services to business and other corporate customers. It extends loans for a broad range of corporate purposes, including (among others) financing commercial real estate, construction of particular properties, commercial and industrial uses, acquisition and equipment financings, and other general corporate needs. It is also engaged in small business administration (SBA) and agricultural finance lending, and it offers corporate credit card products, as well as corporate deposit products and treasury management services. In addition, it offers a variety of consumer banking products and services, including (among others) savings, time, and checking deposit products.