PNC Financial Services to buy United National Bancorp for 4.08 times revenue

Weekly Corporate Growth Report, Sep 1, 2003

The Deal; PNC Financial Services Group Inc. has agreed to acquire United National Bancorp in a cash and stock transaction. The total payment will consist of about 6.55 million common shares of PNC and $320 million in cash. The final value of the transaction will be based on the average PNC stock price shortly before completion of the deal. Based on recent closing prices, the deal values United National at approximately $33.89 per share. The transaction has been approved by the boards of both companies. The deal is expected to close in January 2004.

Discussion: United National Bancorp is the holding company for UnitedTrust Bank. The bank operates some 50 branches in central New Jersey and eastern Pennsylvania. The bank's loan portfolio consists primarily of real estate, consumer, and commercial loans. United National acquired Vista Bancorp in 2002.

The PNC Financial Services Group supplies a diverse range of financial services. The company own PNC Bank, which operates some 700 branches in Delaware, Kentucky, New Jersey, Ohio, and Pennsylvania. PNC also owns about 70 percent of publicly traded fund manager BlackRock, which specializes in fixed-income products.

The acquisition of United National is expected to result in the reduction of about $31 million in operating expenses through the elimination of administrative and operational redundancies by 2005.