Heritage Financial Corp. (HFWA: Quote), the parent company of Heritage Bank, announced that it signed a definitive agreement to acquire Valley Community Bancshares, Inc., the holding company for Valley Bank of Puyallup, Washington. The combined company will have approximately $1.6 billion in assets with enhanced market share in the Puget Sound region.
The board of directors of Heritage Financial and Valley Community Bancshares unanimously approved the transaction, which is subject to approval by Valley’s shareholders, as well as regulatory approvals and other customary closing conditions.
Following closing of the transaction, which is anticipated to take place in the third quarter of 2013, Valley Bank will be merged into Heritage Bank.
The purchase price will be paid 50% in cash and 50% in Heritage common stock. As a result, Valley’s shareholders will be entitled to receive approximately $19.50 in cash and 1.3611 shares of Heritage’s common stock per share. Using a 30-day average price per share of Heritage stock for a period ending March 1, 2013 results in a Heritage stock price of $14.327, which when multiplied by the fixed exchange ratio of 1.3611 provides an initial valuation of $39.00 per share or approximately $44.2 million.
David Brown, CEO of Valley, has been nominated by the Valley board to serve on Heritage’s board. Brown will also assist with the transition process and plans to retire from active employment after a successful integration.
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by RTT Staff Writer
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