Business First Bancshares in Baton Rouge, La., has agreed to buy Pedestal Bancshares in Houma, La.
The $2.3 billion-asset Business First said in a press release Wednesday that it will pay $211 million in cash and stock for the $1.2 billion-asset Pedestal. The deal, which is expected to close in the second quarter, priced Pedestal at 157% of its tangible book value.
“This is a transformative, franchise-building opportunity for our company,” Jude Melville, Business First’s president and CEO, said in the release.
Pedestal “has for many years been a well-managed, high performing competitor of ours, and teaming up with them grows our market share, broadens our shareholder base, and strengthens our already deep talent pool," Melville added.
Pedestal has 22 branches, $900 million in loans and $1 billion in assets. The company consolidated its five bank charters and rebranded as Pedestal in 2018.
Four Pedestal directors will join Business First’s board. Mark Folse, Pedestal’s president and CEO, will join the executive team of Business First’s bank.
The deal is expected to be 25% accretive to Business First’s earnings per share in the first full year of combined operations. It should take the company less than three years to earn back an expected 10% dilution to its tangible book value.
Business First plans to cut about 35% of Pedestal’s annual noninterest expenses, or roughly $14.4 million. The company expects to incur $12.1 million in merger-related expenses.
Raymond James and Alston & Bird advised Business First. Stephens and Fenimore, Kay, Harrison & Ford advised Pedestal.
