Through the merger, Old National will strengthen its presence in the Nashville market, where its high-net-worth service division, 1834 Wealth team, was introduced last year, and add a total of 23 banking centres in Tennessee and North Carolina
Old National Bank located in Granger, Indiana. (Credit: Mrprofdrjjjj/Wikipedia)
Old National Bancorp, the holding company of Old National Bank, has agreed to acquire financial services firm CapStar Financial in an all-stock transaction valued at $344m.
Under the terms of the merger agreement, CapStar shareholders will receive 1.155 shares of Old National common stock, in exchange for each share of CapStar common stock held.
The purchase price values the transaction at $16.64 per share, or a total of around $344.4m, based on Old National’s 30-day volume weighted average closing price on 25 October 2023.
The merger agreement has been approved by the Board of Directors of both companies.
It is expected to be completed in the second quarter of 2024, subject to regulatory, and CapStar shareholders’ approval.
Old National CEO Jim Ryan said: “This partnership with CapStar, one of the most highly respected and successful community banks in Tennessee, is a tremendous cultural fit and a natural extension of our growth strategy.
“By establishing a full-service banking presence in Nashville and several other strong Tennessee and North Carolina communities, we can more fully serve our existing Nashville-area clients while also introducing our client- and community-focused brand of banking to the surrounding region.”
Old National said that the business combination will strengthen its recent presence in the Nashville market and add 23 banking centres in Tennessee and North Carolina.
It will add seven locations in Nashville, three in Wayne County, two each in Athens, Lawrence, Monroe, and Coffee Counties, Tennessee, along with one location each in Etowah, Cleveland, Chattanooga, Knoxville, and one location in Asheville, NC.
Last year, the bank holding company entered the Tennessee market by introducing its high-net-worth service division, 1834 Wealth team, in Nashville.
Recently, it has added a Nashville-based commercial banking and lending team, bringing its total assets to $3.3bn, total loans to $2.3bn, and deposits to $2.8bn as of 30 September 2023.
Keefe, Bruyette & Woods, A Stifel Company, served as financial advisor and Dykema Gossett as legal advisor to Old National on the transaction.
Also, Morgan Stanley & Co. served as financial advisor and Wachtell, Lipton, Rosen & Katz as legal advisor to CapStar.
CapStar president and CEO Timothy Schools said: “Over the past five years, our team has repositioned CapStar, strengthening its performance and long-term prospects.
“In looking to the next five years, it is my belief Old National’s like-minded culture and scale best positions our employees, customers, and shareholders to continue our positive momentum.
“Excitingly, CapStar employees will be a major contributor to strengthening Old National’s recent entry into Nashville.
“Old National has hired market-leading individuals we are well familiar with, and shareholders greatly benefit from a material increase in dividends and daily trading volume while receiving a very attractively priced stock with strong potential for upside.”