South Financial Group to Buy CNB Florida Bancshares for 3.29 Times Revenue, The

Weekly Corporate Growth Report, Jan 26, 2004

The Deal: The South Financial Group Inc. has entered into a definitive agreement to acquire CNB Florida Bancshares Inc. for about $157 million in stock. Under the terms of the agreement, South Financial will issue 0.84 shares of its stock in exchange for each share of CNB Florida. Based on recent closing prices, the deal values CNB Florida at $24.11 per share. The deal, which still requires regulatory and shareholder approvals, is expected to close in July.

Discussion; CNB Florida Bancshares is the holding company for CNB National Bank. The bank operates more than a dozen branches in northeastern Florida. In addition to traditional retail banking services, the bank also provides Small Business Administration loans, home equity loans, auto loans, and commercial and residential mortgages.

The South Financial Group is the holding company for Carolina First Bank. The bank operates approximately 100 branches in the North and South Carolina. South Financial also owns Mercantile Bank, which operates more than 30 branches in the Orlando, Tampa, and Jacksonville, Florida metropolitan areas. South Financial subsidiary CF Financial invests in small bank-related technology companies.

South Financial expects to the acquisition to expand its presence in northeastern Florida. CNB Florida will be merged into Mercantile Bank, which will then have 50 branches and more than $3 billion in assets.