Seacoast Banking Corporation of Florida (NasdaqGS:SBCF) signed a letter of intent to acquire Drummond Banking Company on March 12, 2022. The letter of intent provided for an approximately 90% Seacoast stock/10% cash transaction, with a fixed exchange ratio of 48.6460 shares of Seacoast stock and $194.75 in cash consideration for each share of Drummond common stock outstanding. Seacoast Banking Corporation of Florida (NasdaqGS:SBCF) signed a definitive agreement to acquire Drummond Banking Company for approximately $170 million on May 4, 2022. Seacoast Banking Corporation of Florida will issue 51.9561 shares for each share of Drummond. Drummond operates 18 branches across North Florida with deposits of approximately $932 million and loans of $543 million as of March 31, 2022. Following the merger, Luther Drummond and Gray Drummond will remain with Seacoast, serving as Market Executives. Scott Guthrie will also remain with Seacoast, serving as Market President. Drummond shall pay a termination fee of $7.8 million to Seacoast. As on March 31, 2022, Drummond reported total assets of $1.03 billion and total shareholdersÆ equity of $93.5 million.
Transaction is subject to (1) adoption of the Merger Agreement by DrummondÆs shareholders, (2) required regulatory consents shall have been obtained or made and be in full force and effect and all waiting periods required by law shall have expired and such required regulatory consents shall not be subject to any condition or consequence that would, after the effective time of the Merger, have a material adverse effect on Seacoast or any of its subsidiaries, including Drummond, (3) the absence of any order issued by any governmental authority preventing the consummation of the Merger and the absence of any law or order enacted, entered, promulgated or enforced by any governmental entity that prohibits, restrains or makes illegal the consummation of the Merger, (4) the effectiveness of the registration statement for the Seacoast common stock to be issued in the Merger and (5) the approval for listing of the Seacoast common stock to be issued in the Merger on NASDAQ. As of May 10, 2022, DrummondÆs Board of Directors has by the affirmative vote of at least a majority of the entire Board of Directors of Drummond duly approved the merger agreement and Seacoast Banking Corporation of Florida has also approved the merger agreement. Closing of the transaction is expected to close early fourth quarter of 2022. The transaction is expected to be significantly accretive to earnings in 2023 with modest dilution of tangible book value. We Seacoast expects the transaction to be 8.6% accretive to earnings per share in 2023, with modest dilution of tangible book value per share that will be earned back in 1.6 years.
Piper Sandler & Co. served as financial advisor and Randy Moore, Michael Stevens, Brendan Clegg, Sean Hyatt, Tejas Patel, Kyle Woods, Cliff Stanford, Blake Estes, Brian Harvel, Chris Marquardt, Sarah McElroy and Caroline Eisner of Alston & Bird LLP served as legal counsel to Seacoast. Hovde Group, LLC served as financial advisor with a fee of $1.5 million and fairness opinion provider with a fee of $200,000 and Smith Mackinnon, PA served as legal counsel to Drummond. SeacoastÆs transfer agent was Continental Stock Transfer and Trust Company. Saltmarsh, Cleaveland & Gund, P.A. acted as due diligence provider to Drummond.
Seacoast Banking Corporation of Florida (NasdaqGS:SBCF) completed the acquisition of Drummond Banking Company on October 7, 2022.