Carolina First Corp. to buy the Anchor Financial Corp. for 3.31 times revenue, The

Weekly Corporate Growth Report, Jan 17, 2000

The Deal: The Carolina First Corporation has agreed to acquire the Anchor Financial Corporation for $290.7 million in stock. As a result of the transaction, a new holding company, which will be called the South Financial Group, will be formed. Based on Carolina First's closing price of $31.9375, the deal values each Anchor share at $35.89. After the news of the acquisition was announced, Anchor Financial stock increased $5.8125 to close at $31.9375, while Carolina First declined 93.75 cents, to close at $15.5625.

Discussion: Anchor Financial, the holding company for Anchor Bank, operates 28 offices in North and South Carolina. The company has expanded inland through acquisitions. The bank offers deposits including CDs and checking, savings, and money market accounts. Real estate mortgages make up about 43% of Anchor's loan portfolio. The bank also offers commercial, agricultural, and personal loans, among others. Additionally, the company's brokerage subsidiary Anchor Capital Corporation sells securities such as annuities and mutual funds.

Carolina First BancShares is the bank holding company for Lincoln Bank of North Carolina, Cabarrus Bank of North Carolina and Community Bank & Trust Company. With about 35 offices in 12 communities near Charlotte, the banks offer products including checking accounts, NOW accounts, savings, and credit cards. The company makes about 60% of its loans for real estate mortgages and about 15% for commercial loans. It's subsidiary, Carolina First Mortgage Corp. originates mortgage loans.