NEW YORK--(BUSINESS WIRE)--Tupelo, Mississippi based Renasant Corporation (NASDAQ: RNST) ("Renasant”), the parent company of Renasant Bank, and Brand Group Holdings, Inc. ("Brand"), the parent company of The Brand Banking Company, have announced the signing of a definitive merger agreement whereby Brand and its subsidiary bank will merge with and into Renasant. The transaction currently valued at approximately $453 million in aggregate (or 224% price/TBV), includes a 5% cash component, with the balance to be paid in RNST stock, and is expected to close in the third quarter of 2018. Moreover, the successful integration of the transaction is expected to significantly expand Renasant Corporation’s presence in the Atlanta MSA, which represents the second-largest MSA in the Southeast by population.
On August 9, 2017, KBRA affirmed the ratings, including senior unsecured and subordinated debt ratings of BBB+ and BBB, respectively, for Renasant Corporation, as well as a senior unsecured debt rating of A- for Renasant Bank. The Outlook on the long-term ratings remains Stable.
KBRA notes Brand’s weak historical performance and elevated levels of NPAs as evidenced by KBRA’s Subscription Rating Service’s financial strength rating of C. However, given RNST’s acquisitive experience, marked with rigorous due diligence processes and historically successful integrations, KBRA considers this transaction to be within the institution’s strategy.
In KBRA’s view, this transaction is neutral to Renasant’s ratings in the short-term, though, the successful integration of the transaction may lead to stronger deposit gathering capabilities and the recognition of cost synergies over time.
The ratings are based on KBRA’s Global Bank and Bank Holding Company Rating Methodology published on February 19, 2016.
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