Blue Ridge consolidates with Bay Banks

Blue Ridge Bankshares is acquiring Bay Banks of Virginia in all-scrip reverse takeover worth USD 100.40 million.

Under the terms of the merger agreement, which was unanimously approved by the boards of both companies, the NYSE American-listed suitor is issuing 0.5 new scrips for each stock owned in the OTC Market-listed, Richmond-headquartered lender.

The exchange implies a price of USD 7.53 apiece, based on the 20-day volume weighted average of USD 15.05 as of 10th August.

Following the reverse takeover, shareholders of Bay Banks will own 53.8 per cent of the resulting entity, while those of Charlottesville-heaquartered Blue Ridge will hold the 46.2 per cent balance.

The deal paves the way for the fourth-largest community lender in Virginia by deposit market share for institutions under USD 10.00 billion in assets.

Operating under the Blue Ridge name, the group would be headquartered in Charlottesville and have its banking subsidiaries based out of Richmond.

The entity had a pro forma total market capitalisation of USD 200.00 million, total assets of USD 2.40 billion, gross loans of USD 1.90 billion and total deposits of USD 2.20 billion, as of 30th June 2020.

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It is expected to have a footprint across seven of the state’s metropolitan statistical areas (MSAs), including the Richmond and Hampton Roads MSAs.

Financial metrics include a tangible book value accretion of more than 7.0 per cent, and double-digit earnings in 2021.

The combined company is expected to achieve strong core profitability metrics of 1.2 per cent return on average assets and 15.0 per cent return on average tangible common equity in 2021.

Zephyr, the M&A database published by Bureau van Dijk, shows 30 acquisitions totalling USD 6.78 billion targeting US-based banks and their holding companies have been announced in 2020 to date.

Some of the largest feature South State taking over CenterState Bank, Pacific Premier purchasing Opus Bank and FB Financial picking up Franklin Financial.

© Zephus Ltd

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