UMB Financial Corporation, a $16.3 billion diversified financial holding company as of September 30, 2014, headquartered in Kansas City, Mo., and the Pohlad family of Minneapolis, Minn., announced the execution of a definitive agreement for UMB to acquire Marquette Financial Companies (MFC), a $1.3 billion financial-services company owned by the Pohlad family, in an all-stock transaction. MFC operates 13 branches in Arizona and Texas, two national specialty-lending businesses focused on asset-based lending and factoring as well as an asset-management firm.
Upon closing, the Pohlad family will receive approximately 3.4 million shares, or $182.5 million based on UMBF’s closing price of $53.16 on Friday, December 12, 2014, representing approximately 7% ownership in UMBF. This consideration represents a multiple of 1.6x MFC’s tangible book value as of September 30, 2014. The consideration is subject to closing equity adjustments.
“With this announcement, UMB continues to demonstrate our commitment to partnering with companies that are a strategic, financial and cultural fit. We expect the combination of UMB and MFC to be financially attractive as a result of our complementary balance sheets, increased penetration of strategic markets and the addition of national business lines,” said Mariner Kemper, chairman and CEO, UMB Financial Corporation.
“This acquisition will quickly increase UMB’s presence in Arizona and Texas—two key growth markets for UMB—and supplement UMB’s commercial-banking services with national factoring and asset-based lending and asset-management businesses. Cultural compatibility, so critical to successful integration, was another important factor in our criteria, and we see great similarities in how our companies approach business practices, engage our associates and serve our communities,” Kemper said.
MFC is a privately held financial-services company with a portfolio of businesses, including Phoenix-based Meridian Bank, N.A., and Ft. Worth-based Meridian Bank Texas. Meridian Bank, N.A. has eight branches in the Phoenix area, with total assets of $720 million, loans of $539 million and deposits of $574 million, as of September 30, 2014. Meridian Bank Texas has five branches in Ft. Worth, Dallas and Denton, with total assets of $433 million, loans of $318 million and deposits of $378 million, as of September 30, 2014.
Within Meridian Bank, N.A. are Dallas-based Marquette Business Credit, which provides asset-based loans for working capital, recapitalization, growth, and mergers and acquisitions; Marquette Transportation Finance, which provides accounts-receivable financing and factoring primarily for transportation businesses, and its division, Marquette Commercial Finance; and Marquette Asset Management, which provides private asset-management and trust services to individuals, families and institutions, based in Minneapolis, MM.
Speaking on behalf of the Pohlad family, Jim Pohlad said that confidence in this transaction is evidenced by the family’s involvement as a UMBF investor following the close of the transaction.
“We are excited about the potential power these two companies will generate by operating together after closing,” Pohlad said. “UMB rose to the top of our list of potential partners due to their shared vision, culture and track record for success. We are looking forward to UMB’s continued growth.”
“Marquette and UMB have foundations built on a commitment to customer service, hiring talented people and growing through diversification,” said Bert Colianni, director of Marquette Financial Companies. “Additionally, we each have benefitted from the leadership of historically strong families with similar approaches to business and community involvement. We anticipate this partnership will offer our customers and associates great opportunities with expanded locations and product sets.”
The transaction has been approved by the boards of directors at both companies and is anticipated to close mid-2015. Both companies will continue to conduct business as usual while the acquisition is pending regulatory approval.
RBC Capital Markets, LLC served as exclusive financial adviser to UMB. Sullivan & Cromwell and Holland & Hart served as legal counsel to UMB. D.A. Davidson served as exclusive financial adviser to MFC. Briggs and Morgan served as legal counsel to MFC.