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Horizon Bancorp (NASDAQ: HBNC), an Indiana headquartered community bank holding company, announced today that it entered into a definitive agreement to acquire Heartland Bancshares, Inc. (OTCBB: HRTB) and its wholly-owned subsidiary, Heartland Community Bank, based in Franklin, Indiana. Under the terms of the merger agreement, Horizon has agreed to issue 0.54 shares (subject to adjustment) of its common stock for each share of Heartland common stock outstanding at the effective time of the merger. Based upon the closing price of Horizon’s common stock of $18.00 on February 8, 2012, the indicated value of the transaction was approximately $9.72 per share of Heartland’s common stock. Subject to Heartland’s shareholder and regulatory approval, the companies anticipate the transaction will close in the second quarter of 2012.
“We are enthusiastic about the opportunity to expand our presence in Central Indiana, which is an attractive, growth-oriented market.” said Craig M. Dwight, Horizon’s President and CEO. “Heartland, which has the No. 1 deposit share in Johnson County, will provide a strong foothold in Central Indiana and further establish Horizon’s position as an Indiana-focused financial institution.”
Heartland Community Bank has reported total assets of approximately $246.0 million, total deposits of approximately $217.9 million and total loans of approximately $137.7 million on December 31, 2011 (all amounts are unaudited).
Dwight added, “Horizon anticipates the acquisition will be accretive to earnings per share after transaction costs. By consolidating back-office capabilities, Horizon anticipates a 25% operating cost savings compared with Heartland’s current operations.” Dwight also indicated that Horizon has a successful track record of integrating acquired companies, such as American Trust & Savings Bank (acquired in 2010) and Alliance Financial Corporation (acquired in 2005), and believes they will be equally successful in integrating the Heartland operations into Horizon’s.
Based on Horizon’s closing price per share and Heartland’s total dilutive shares outstanding, the acquisition pricing is approximately $14.0 million on February 8, 2012, based on 1,442,727 outstanding shares of Heartland common stock.