United Community Banks, Inc. (NasdaqGS:UCBI) entered into a definitive agreement to acquire Aquesta Financial Holdings, Inc. (OTCPK:AQFH) for $92.5 million on May 12, 2021. Under the terms of the agreement, Aquesta stockholders will be entitled to elect to receive, in respect of each share of Aquesta common stock held by them, either 0.6386 shares of common stock of United Community or $21.50 in cash, provided that the aggregate consideration issued by United Community will be prorated as necessary to ensure that no more than 30% of the aggregate consideration is issued in cash. The transaction value include approximately $12 million in value for outstanding options and warrants to acquire Aquesta common stock. United Community shareholders will own 96.9% stake in proforma company and Aquesta shareholders will own 3.1% of pro forma company. If the merger agreement is terminated under certain circumstances by Aquesta, Aquesta required to pay to United a termination fee equal to $5.2 million.

The transaction is subject to the receipt of regulatory approvals, approval of Aquesta's stockholders, expiration or termination of all statutory waiting periods in respect thereof, authorization for listing on NASDAQ of the shares of United common stock, effectiveness of the registration statement on Form S-4 with respect to the shares of the United common stock to be issued in the merger, the holders of no more than 15% of the aggregate outstanding shares of Aquesta common stock (including the Aquesta preferred stock to be converted into Aquesta common stock) having properly notified Aquesta of their intent to exercise dissenters' rights,
and receipt by Aquesta of an opinion from its counsel to the effect that the merger will qualify as a “reorganization” within the meaning of Section 368(a)(1)(A) of the Code. Aquesta's board of directors has unanimously approved the merger. Aquesta's board of directors unanimously recommends that Aquesta stockholders vote “FOR” the transaction. The annual meeting of Aquesta stockholders will be held on September 15, 2021.

The transaction is expected to close in the fourth quarter of 2021. The acquisition is expected to be accretive to United Community's earnings per share by approximately $0.06 to $0.09 in 2022, depending upon the mix of United Community shares and cash elected by Aquesta stockholders and is consistent with United Community's stated acquisition criteria pertaining to tangible book value and targeted internal rates of return.

Michael P. Corso of Hovde Group, LLC acted as financial advisor and Neil Grayson, Lee Kiser and Benjamin Barnhill of Nelson Mullins Riley & Scarborough LLP acted as legal advisors for United Community. Piper Sandler & Co. acted as financial advisor and fairness opinion provider to Aquesta. Piper Sandler will receive a fee for such services in an amount equal to 1.45% of the aggregate purchase price, which fee is contingent upon the closing of the merger. At the time of announcement of the transaction, Piper Sandler's fee was approximately $1.94 million. Piper Sandler also received a $300,000 fee from Aquesta upon rendering its opinion, which opinion fee will be credited in full towards the advisory fee which will become payable to Piper Sandler upon consummation of the merger. Todd H. Eveson of Wyrick Robbins Yates & Ponton LLP acted as legal advisor to Aquesta. Continental Stock Transfer & Trust Company acted as transfer agent to Aquesta Financial.

United Community Banks, Inc. (NasdaqGS:UCBI) completed the acquisition of Aquesta Financial Holdings, Inc. (OTCPK:AQFH) on October 1, 2021. As a part of closing, Aquesta Financial Holdings, Inc. (Aquesta), including its wholly-owned subsidiary, Aquesta Bank, which was merged into United's bank subsidiary, United Community Bank. Aquesta will now operate under the United brand. Their nine branches, located in Charlotte's most attractive markets and also in the coastal city of Wilmington, North Carolina, will add to United's high growth footprint.