DEFM14A: First Busey Corporation to Acquire CrossFirst Bankshares in All-Stock Deal

First Busey Corporation will acquire CrossFirst Bankshares in an all-stock transaction, creating a combined entity with approximately $20 billion in assets.

Summary

• First Busey Corporation (Busey) and CrossFirst Bankshares, Inc. (CrossFirst) have agreed to a merger where Busey will acquire CrossFirst in an all-stock transaction.
• The combined company will have approximately $20 billion in total assets, $17 billion in total deposits, $15 billion in total loans, and $13 billion in wealth assets under care.
• CrossFirst stockholders will receive 0.6675 of a share of Busey common stock for each share of CrossFirst common stock they own.
• Based on Buseys stock price on August 26, 2024, the exchange ratio represented approximately $18.28 in value for each share of CrossFirst common stock, representing a merger consideration of approximately $916.8 million on an aggregate basis.
• Busey expects to issue approximately 33.2 million shares of Busey common stock to CrossFirst stockholders.
• Busey stockholders will own approximately 63.5% and former CrossFirst stockholders will own approximately 36.5% of the common stock of Busey following the completion of the merger.
• Special meetings for Busey and CrossFirst stockholders to approve the merger are scheduled for December 20, 2024.
• The merger is expected to qualify as a reorganization for U.S. federal income tax purposes, meaning holders generally will not recognize any gain or loss on the exchange of shares.

Sentiment

Score: 7

Explanation: The document presents a positive outlook on the merger, highlighting the strategic benefits and financial strength of the combined company. However, it also acknowledges potential risks and challenges, resulting in a moderately positive sentiment.

Positives

• The merger creates a premier full-service commercial bank with a large geographic footprint.
• The all-stock transaction is expected to be tax-free for shareholders.
• The combined company will have a strong balance sheet with significant assets, deposits, and loans.
• The merger is expected to provide opportunities for growth in wealth management and payment technology solutions.
• The merger is expected to be accretive to Buseys earnings per share.

Negatives

• The value of the merger consideration will fluctuate based on the market value of Busey common stock.
• Integration of the two companies may be complex and costly.
• There is a risk of losing key employees during the integration process.
• The merger is subject to regulatory approvals, which may be delayed or not obtained.
• The merger agreement may be terminated under certain circumstances, resulting in a termination fee.

Risks

• The market price of Busey common stock may fluctuate, affecting the value of the merger consideration.
• Integration of the two companies may be more difficult, costly, or time-consuming than expected.
• Busey may be unable to retain key personnel from both companies.
• Regulatory approvals may not be received or may impose burdensome conditions.
• The merger agreement may be terminated, and a termination fee may be payable.
• Busey will assume CrossFirsts outstanding debt obligations, which could affect Buseys ability to raise additional capital.
• The merger could disrupt Buseys and CrossFirsts relationships with customers, suppliers, and business partners.
• The merger agreement limits Buseys and CrossFirsts ability to pursue alternatives to the merger.
• Busey and CrossFirst stockholders will have reduced ownership and voting interest in the combined company.
• The issuance of Busey common stock in the merger may adversely affect the market price of Busey common stock.

Future Outlook

The merger is expected to create a premier full-service commercial bank serving clients from seventy-seven full-service locations across ten states. The combined company is expected to have a strong balance sheet and provide opportunities for growth in wealth management and payment technology solutions.

Management Comments

• The boards of directors of Busey and CrossFirst strongly support this combination of our companies.
• We urge you to read this document carefully and in its entirety.

Industry Context

The merger reflects a trend of consolidation in the banking industry, where companies are seeking to increase scale and geographic reach to improve competitiveness and profitability.

Comparison to Industry Standards

• The merger creates a combined entity with approximately $20 billion in assets, which is comparable to other regional banks such as First Merchants Corporation ($18.5B), Enterprise Financial Services Corp ($14.5B), and Park National Corporation ($13.5B).
• The exchange ratio of 0.6675 shares of Busey common stock for each share of CrossFirst common stock is within the range of recent bank mergers, but the lack of a market premium is unusual and reflects the recent stock performance of CrossFirst.
• The pro forma ownership of 63.5% for Busey stockholders and 36.5% for CrossFirst stockholders is typical of mergers where the acquiring company is larger than the target.
• The estimated transaction costs of $75.3 million are within the range of similar transactions, but the actual costs may vary.

Management Changes

Corporate Governance

Legal Proceedings

• Stockholders of Busey and/or CrossFirst may file lawsuits against Busey, CrossFirst and/or the directors and officers of either company in connection with the merger.

Stakeholder Impact

• CrossFirst stockholders will receive Busey common stock and become Busey stockholders.
• Busey stockholders will continue to own their existing shares of Busey common stock.
• Employees of both companies may experience uncertainty about their future roles.
• Customers, suppliers, and business partners may experience uncertainty about their future relationships with the combined company.

Next Steps

• Busey and CrossFirst stockholders will vote on the merger agreement at special meetings on December 20, 2024.
• Busey and CrossFirst will seek regulatory approvals for the merger.
• Busey and CrossFirst will work to integrate their businesses after the merger is completed.

Key Dates

Keywords

merger, acquisition, bank, stock transaction, financial services, Busey, CrossFirst, assets, deposits, loans, wealth management