Nicolet Bankshares (NCBS) to Acquire First Menasha Bancshares in $76.6M Deal

November 4, 2016 9:01 AM EDT

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Nicolet Bankshares, Inc. (Nasdaq: NCBS) and First Menasha Bancshares, Inc. (OTC: FMBJ) jointly announce the execution of a definitive merger agreement, pursuant to which Nicolet will acquire First Menasha and its wholly owned banking subsidiary, The First National Bank- Fox Valley ("FNB-Fox Valley"). The move will expand Nicolet's presence in the Fox Valley and open new markets in Neenah, Menasha, and Oshkosh.

Based on the financial results as of September 30, 2016, the combined company would have pro forma total assets of $2.7 billion, deposits of $2.3 billion and loans of $1.9 billion.

Bob Atwell, CEO and Chairman of Nicolet said, "We continue to grow in the areas where we can make an impact. We have known FNB-Fox Valley for some time and respect their commitment to community banking. We are pleased to welcome them to the Nicolet family."

"The combination of Nicolet and FNB-Fox Valley makes perfect sense," said Peter Prickett, President and CEO of FNB-Fox Valley. "We are both customer-first, service-driven cultures. It is a great fit for our customers and the community. The combined institution will be the largest community bank in each of the Green Bay and Fox Cities markets and provides the size and scale needed today to provide stability, depth of resources, and great value to our customers, communities, and shareholders," Prickett continued.

Mike Daniels, President and CEO of Nicolet National Bank said, "We work to make a difference in the communities we serve. To do this effectively, we want to be the lead-local community bank. This breakout move puts us in that position in the Fox Valley. Now, our job is to focus on a smooth transition for employees and customers."

Under the terms of the merger agreement, Nicolet will acquire First Menasha with Nicolet being the surviving corporation. In the merger, First Menasha shareholders shall have the right to receive, at the election of each holder and subject to proration, cash of $131.50 per share of First Menasha common stock and/or 3.411 shares of Nicolet common stock for each share of First Menasha common stock, with the total consideration to consist of between 25% cash/75% stock and 40% cash/60% stock. Based on Nicolet's closing price of $38.09 as of Thursday, November 3, 2016, the merger consideration is valued at approximately $76.6 million.

The merger agreement outlines proration procedures if the cash consideration is over- or undersubscribed. Further, the merger agreement provides for a cap and collar to re-set the exchange ratio should the Nicolet Common Stock Price, as defined in the merger agreement, rise or fall, by $5.00 or more per share from $38.55.

Nicolet intends to appoint two members of First Menasha's current board of directors to the boards of directors of Nicolet and Nicolet National Bank upon the completion of the transaction.

The estimated transaction value is a 1.65 multiple of First Menasha's tangible book value as of September 30, 2016. Nicolet estimates high single-digit EPS accretion in 2018 and an estimated tangible book earn-back period of less than five years.

The transaction has been unanimously approved by the board of directors of both companies. It is subject to First Menasha shareholder approval, regulatory approvals and other customary closing conditions and is expected to close in second quarter 2017. Upon consummation of the transaction, all branch offices of FNB-Fox Valley are expected to open as Nicolet National Bank branches, while Nicolet's existing branch at 2400 S. Kensington Drive in Appleton will close.

Bryan Cave LLP served as legal counsel to Nicolet in this transaction. Stephens Inc. served as financial advisor and provided a fairness opinion to First Menasha, and Reinhart Boerner Van Deuren s.c. served as legal counsel.



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