South Financial Group to buy Gulf West Banks for 3.07 times revenue, The

Weekly Corporate Growth Report, Apr 1, 2002

Featured Transaction

The Deal: The South Financial Group has agreed to purchase Gulf West Banks Inc. in a cash and stock deal valued at approximately $115 million. To complete the deal, South Financial will issue 4.5 million shares and pay about $32.4 million. According to the agreement, each share holder of Gulf West will either receive .695 shares of South Financial stock for each Gulf West share, or receive $13.60 per share in cash. Subject to regulatory approval, the deal is expected to be completed by fall of 2002.

Discussion: Gulf West Banks is the holding company that controls Mercantile Bank. Mercantile has about 15 offices in west central Florida. The bank's products include checking and savings accounts, certificates of deposit, credit card services, travelers checks, and loans. The banks loan portfolio is mostly based on commercial real estate, but also includes residential mortgages and consumer loans.

The South Financial Group is the holding company for Carolina First Bank and Citrus Bank, which operate in North Carolina and Florida. Both banks offer an array of financial services including checking and savings accounts, certificates of deposit and loans.

The purchase of Gulf West adds the high-growth markets of Tampa and St. Petersburg, Florida to South Financial's banking franchise.