RALEIGH, N.C., Oct. 24, 2011 /PRNewswire/ -- Piedmont Community Bank Holdings, Inc., announced today it has received regulatory approval to invest $75 million in Crescent Financial Corporation (NASDAQ: CRFN) and therefore acquire a majority interest in the company.
Adam Abram, chairman of Piedmont, will be named chairman of Crescent Financial, and Scott Custer, president and chief executive officer of Piedmont, will become chief executive officer of Crescent Financial upon closing of the transaction, which is expected by the end of November 2011.
"We are pleased to be able to take this important step forward in our strategic development," said Custer. "We believe that our simple, direct approach to community banking will be well-received by Crescent's customers."
The investment agreement entered into by Piedmont and Crescent provides that Piedmont will invest $75 million in Crescent in exchange for Crescent common stock priced at $4 per share. As a result of the investment, Piedmont will own approximately 66 percent of Crescent shares on a fully diluted basis. In addition, the agreement provides for Piedmont to make a tender offer to Crescent's existing shareholders to purchase up to 67 percent (6,442,105 shares) of currently outstanding Crescent common stock at a price of $4.75 per share. If the maximum number of shares is tendered, Piedmont will pay approximately $30.6 million for all such shares, and Piedmont would then own a total of approximately 89 percent of all outstanding common Crescent shares. Crescent shares closed at $3.00 per share on Friday, October 21st.The tender offer will commence in the next several weeks and will be evidenced by individual mailings to Crescent's shareholders.