Iberiabank in Lafayette, La., has agreed to buy Sabadell United Bank in Miami for $1 billion.
The $21.7 billion-asset Iberiabank will pay $803 million in cash, along with 2.6 million shares of its common stock valued at $222 million, for the $5.8 billion-asset Sabadell United. Iberiabank said in a press release that it expects to finance part of the cash portion of the deal through a roughly $500 million secondary offering.
Sabadell United’s parent company, Banco Sabadell in Spain, would own 4.9% of Iberiabank common stock when the deal closes.
The acquisition is the second-biggest bank deal announced in 2017, behind only Pinnacle Financial Partners' pending purchase of BNC Bancorp in High Point, N.C. The deal price values Sabadell United at about 195% of its tangible book value.
“With a population of over 6 million people, the greater Miami area is a dynamic market with a strong concentration of commercial and industrial clients that are particularly attractive to us,” Daryl Byrd, Iberiabank’s president and CEO, said in the company's release. “With this acquisition, our company will have a meaningful presence in each of the five largest markets in the Southeast.”
The deal is expected to be 6% accretive to 2018 earnings per share and 10% accretive in 2019, Iberiabank said. It is also expected to be 2% dilutive to tangible book value per share; the dilution is expected to be earned back in three and a half years. The estimated internal rate of return is about 19%, Iberiabank said.
The deal is expected to be completed in the second half of this year.
Sabadell United Bank has 26 branches in six Florida counties. Banco Sabadell has owned the bank since 2007 when it bought the then TransAtlantic Bank. Banco Sabadell said it will continue its corporate banking and international private banking business in Miami.
Iberiabank has 199 branches in seven Southern states, including Florida and Louisiana. The company raised $280 million in December to fund organic growth and acquisitions.
Keefe, Bruyette & Woods and Hunton & Williams advised Sabadell United and its parent company. Goldman Sachs, UBS and Simpson Thacher & Bartless advised Iberiabank.