First Business to Acquire the Parent Company of Alterra Bank,
Expanding Its Entrepreneurial Business Banking Model into the
Attractive Kansas City Market
MADISON, Wis. and LEAWOOD, Kan., May 23, 2014 (GLOBE NEWSWIRE) — First
Business Financial Services, Inc. (Nasdaq:FBIZ) and Aslin Group, Inc.
announced the signing of a definitive agreement for First Business to
acquire Aslin Group, including Alterra Bank, Aslin Group’s wholly owned
subsidiary. The cash-and-stock transaction is valued at an estimated
$30.1 million.
Together, First Business and Alterra have approximately $1.5 billion in
assets. Alterra’s competitive position, talented team, focus on
commercial clients and complementary limited branch business model will
expand the Wisconsin-based First Business’ growth into the attractive
Kansas City metropolitan market, where First Business already operates
its national equipment finance business.
“We are thrilled to welcome the Alterra team, whose expertise in niche
lending and underwriting, coupled with a limited branch funding model
are a perfect match for First Business,” said Corey Chambas, President
and Chief Executive Officer of First Business. “Alterra’s deep local
experience, entrepreneurial approach and impressive track record of
growth, including being the number one SBA lender in Kansas City for
the past two years, reflect a franchise that complements and provides
synergy to First Business in almost every way. We are excited to build
on our profitable growth with this strategically and financially
compelling acquisition, adding value for our shareholders and clients
alike.”
Alterra had $223 million in assets, including $182 million in loans, as
well as $192 million in deposits, as of March 31, 2014. Like First
Business, Alterra operates an entrepreneurial business banking
franchise, providing commercial loans and lines of credit, commercial
real estate loans and treasury management services to small- to
middle-market businesses as well as offering private banking/private
wealth management services to individuals. In addition, Alterra is the
number one most active U.S. Small Business Administration lender in the
Kansas City SBA district, providing First Business with immediate
access to talent and platforms in a new area of lending that is highly
complementary to its current focus. At the same time, Alterra Bank will
be able to offer its commercial clients First Business’ specialized
product and service offerings, including equipment finance, trust and
investment services, factoring and asset based lending.
“We are very excited to join First Business, whose outstanding capital
strength, credit quality and proven track record of growth will provide
Alterra with even greater resources and products to extend to
businesses and individuals in Kansas City,” said Pam Berneking,
President and CEO of Alterra Bank. “Alterra and First Business share a
unique entrepreneurial approach to business banking. Combined, our
seasoned teams will be in an even stronger position to serve our local
communities.”
Upon transaction closing, it is anticipated that Alterra’s brand,
Overland Park and Leawood offices and Kansas state banking charter will
be maintained, with Ms. Berneking joining First Business as President
and CEO of Alterra Bank. The parties expect the Alterra Bank
subsidiary’s board, with a majority of local Kansas directors, to
remain substantially intact.
“Alterra, like First Business, is built around talented local bankers
and other professionals who have extensive experience at larger
institutions. It was important for us to join forces with a team with
upside capacity in terms of banking sophistication,” Mr. Chambas added.
“It is an exciting opportunity to find such a team in Kansas City,
which mirrors our home Wisconsin market in many ways economically and
demographically.”
Under the terms of the Agreement, each outstanding share of common
stock of Aslin Group, Inc. will be converted into the right to receive
$14,435.59, which will be payable in $6,496.02 in cash and $7,939.57 in
First Business common stock. The number of First Business common shares
to be issued will be calculated based on First Business’s 10 day volume
weighted average stock price as of the market close of the third
business day prior to the effective date of the transaction. However,
the volume weighted average share price cannot exceed approximately $51
per share or fall below approximately $34 per share for purposes of the
calculation.
“We are pleased with what the Aslin Group has achieved for its owners
since purchasing the bank in 2010, rebranding it and empowering an
exceptional team of bankers to build a business-focused bank utilizing
the most advanced technology available,” explained Mick Aslin, the
Chairman of Alterra Bank and Chairman and CEO of Aslin Group. “We see
Alterra’s clients benefiting from the resources and capabilities that
First Business brings to the table, while maintaining local Alterra
Bank leadership and decision-making authority right here in Kansas
City. With the structure of this transaction, we now look forward to
participating in the future of First Business through our continuing
ownership.”
The boards of directors of both First Business and Alterra parent
company Aslin Group unanimously approved the transaction. Transaction
closing is anticipated by late 2014, subject to approvals from
regulators, Aslin Group stockholders and other customary conditions.
Transaction Summary
Following are selected terms and metrics associated with the
transaction:
— Cash consideration anticipated to be financed by First Business
subordinated debt offering
— Total transaction value of approximately $30.1 million
— Price to fully diluted tangible book value of 157%
— Price to last twelve months earnings of 18.5x
— Total anticipated pre-tax transaction expenses of approximately $3.0
million
— Expected internal rate of return of nearly 19%
— Estimated tangible book value dilution of approximately 5%, with an
estimated earn-back period of less than 4.5 years
— Anticipated to be approximately 5% accretive to First Business earnings
in the first full 12 months following transaction closing, excluding
one-time merger related expenses, with long-term earnings accretion in
the high single digits
In addition to the information contained within this announcement, an
investor presentation has been posted on First Business’ website at
www.firstbusiness.com/
information regarding this transaction.
First Business was advised by the investment banking firm of Keefe,
Bruyette & Woods, Inc. as well as the law firm of Godfrey & Kahn, S.C.
Alterra was advised by the investment banking firm of Macquarie Capital
and the law firm of Stinson Leonard Street LLP.
Investor Conference Call
Executives from First Business will host a conference call with
investors and the financial community at 11 a.m. Eastern Time today to
discuss this transaction. Those wishing to participate in the call may
dial toll-free 1-888-455-2263 (1-719-785-1753 if outside United States
and Canada) using the conference ID code 9531529. Investors may also
listen live via the Internet at:
http://www.videonewswire.com/
. An archived webcast of
the conference call will be available on this site for one full year.
An investor presentation on this transaction is also available at First
Business’ website www.firstbusiness.com.
About First Business Financial Services, Inc.
First Business Financial Services (Nasdaq:FBIZ) is a $1.3 billion
Wisconsin-based bank holding company that specializes in focused
financial solutions for businesses, key executives and high net worth
individuals through its operating companies. It is the second largest
Wisconsin-based commercial bank holding company listed on NASDAQ or the
New York Stock Exchange. Its companies include: First Business
Bank-Madison; First Business Bank-Milwaukee; First Business
Bank-Northeast; First Business Trust & Investments; First Business
Equipment Finance, LLC; and First Business Capital Corp. For additional
information, visit www.firstbusiness.com or call (608) 238-8008.
About Alterra Bank
Leawood, Kansas-based Alterra Bank, a wholly owned subsidiary of Aslin
Group, has offered commercial banking services in the Kansas City
market since 2010, when a group of private investors led by Aslin
Opportunity Fund BK, LP recapitalized the bank. Since its first full
year of operation in 2011, Alterra has grown its assets at a compound
annual rate of over 24% by providing credit to finance the growth of
Kansas City-based businesses and organizations. The $223 million bank
ranked as Kansas City’s number one Small Business Administration lender
in 2012 and 2013.
Cautionary Statement Regarding Forward-Looking Statements
This press release includes “forward-looking” statements related to
First Business that can generally be identified as describing First
Business’ future plans, objectives or goals. Such forward-looking
statements are subject to risks and uncertainties that could cause
actual results or outcomes to differ materially from those currently
anticipated, including, but not limited to: ability to obtain
regulatory approvals and meet other closing conditions to the merger,
including approval by Aslin Group stockholders, on the expected terms
and schedule; delay in closing the merger; the possibility that the
terms of the proposed merger may need to be modified to satisfy such
approvals or conditions; difficulties and delays in integrating the
respective businesses of First Business and Aslin Group or fully
realizing cost savings and other benefits; business disruption
following the merger; changes in asset quality and credit risk; the
inability to sustain revenue and earnings growth; changes in interest
rates and capital markets; inflation; customer acceptance of First
Business products and services; customer borrowing, repayment,
investment and deposit practices; customer disintermediation; the
introduction, withdrawal, success and timing of business initiatives;
the inability to retain key lending team members; competitive
conditions; economic conditions; the impact, extent and timing of
technological changes, capital management activities, and other actions
of the Federal Reserve Board and legislative and regulatory actions and
reforms; and those factors referenced in Item 1A. Risk Factors in First
Business’ 2013 annual report on Form 10-K, quarterly reports on Form
10-Q and other filings with the Securities and Exchange Commission
(“SEC”). These forward-looking statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of
1995.
Additional Information
Communications in this press release do not constitute an offer to sell
or the solicitation of an offer to buy any securities or a solicitation
of any proxy vote or approval. The proposed merger and issuance of
First Business common stock in connection with the proposed merger will
be submitted to Aslin Group stockholders for their consideration and
approval. First Business will file with the SEC a registration
statement on Form S-4 that will include a proxy statement to be used by
Aslin Group to solicit the required approval of their stockholders in
connection with the proposed merger and will constitute a prospectus of
First Business. First Business may also file other documents with the
SEC concerning the proposed merger. INVESTORS AND SECURITY HOLDERS OF
ASLIN GROUP, INC. ARE URGED TO READ THE PROXY STATEMENT AND PROSPECTUS
REGARDING THE PROPOSED MERGER AND OTHER RELEVANT DOCUMENTS THAT WILL BE
FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME
AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED MERGER. Investors and security holders may obtain a free copy
of the proxy statement and prospectus and other documents containing
important information about First Business and Aslin Group, once such
documents are filed with the SEC, through the website maintained by the
SEC at www.sec.gov. Copies of the documents filed with the SEC by First
Business will be available free of charge on First Business’ website at
www.firstbusiness.com/
Aslin Group and certain of its directors and executive officers may be
deemed to be participants in the solicitation of proxies from the
stockholders of Aslin Group in connection with the proposed
transaction. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests,
by security holdings or otherwise, will be contained in the proxy
statement and prospectus and other relevant materials to be filed with
the SEC when they become available.
CONTACT: Investor Contact:
First Business Financial Services, Inc.
James F. Ropella, Senior Vice President
and Chief Financial Officer
608-232-5970
jropella@firstbusiness.com
Media Contact:
First Business Financial Services, Inc.
Julie Senulis
Casteel Schoenborn
716-650-5134
senulis@csirfirm.com
Alterra Bank
Jeff Chambers, Chief Strategy Officer
913-777-4411
jchambers@alterrabank.com
