United Bankshares to buy Cardinal Financial in $912 million deal
Staff Writer |
United Bankshares signed a definitive merger agreement with Cardinal Financial Corporation, a publicly traded financial services holding company headquartered in Tysons Corner, Virginia.
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This will mark the 31st acquisition of the current administration and the tenth acquisition for United in the D.C. Metro region, one of the most attractive financial markets in the country.
Cardinal, with $4.2 billion in assets, provides banking services through its subsidiary bank, Cardinal Bank, which has a network of 30 branches throughout Virginia, Maryland and Washington, D.C. In addition, Cardinal operates George Mason Mortgage, LLC, a residential mortgage lending subsidiary, and Cardinal Wealth Services, Inc., a wealth management services subsidiary.
Upon completion of the merger, United’s assets will grow to approximately $20 billion with a projected market capitalization of approximately $3.9 billion based on United’s closing price on August 16, 2016. Based upon this projected market capitalization, United would be the 32nd largest banking company in the country.
Cardinal Bank will merge into United Bank, United’s Virginia chartered bank, the largest community bank headquartered in the D.C. Metro region.
Upon completion of the merger, United Bank will have assets of approximately $14.4 billion and will continue to have the # 1 deposit market share among community banks in the Washington, D.C. Metropolitan Statistical Area (MSA).
United will acquire 100% of the outstanding shares of Cardinal in exchange for common shares of United. The exchange ratio will be fixed at 0.71 of United's shares for each share of Cardinal.
The aggregate consideration of the transaction is approximately $912 million based on Cardinal’s common shares outstanding of 32.5 million and options outstanding of 1.02 million. The announced price represents 2.24 times Cardinal’s tangible book value at June 30, 2016.
The transaction was unanimously approved by United’s and Cardinal’s boards and is expected to close mid-2017, pending regulatory approval and United and Cardinal shareholder approval. ■
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