Old National Bancorp recently announced it has entered into a definitive merger agreement to acquire CapStar in an all-stock transaction. Company officials said the partnership includes $3.3 billion in total assets.
Old National is adding 23 total banking centers to its portfolio, all but one of which are in Tennessee. The other is in Asheville, North Carolina. Old National entered the Tennessee market in 2022 when it introduced a Nashville-based 1834 Wealth team (the company’s high-net-worth division) and has since added a Nashville-based commercial banking and lending team.
“This partnership with CapStar – one of the most highly respected and successful community banks in Tennessee – is a tremendous cultural fit and a natural extension of our growth strategy,” said Old National CEO Jim Ryan. “By establishing a full-service banking presence in Nashville and several other strong Tennessee and North Carolina communities, we can more fully serve our existing Nashville-area clients while also introducing our client- and community-focused brand of banking to the surrounding region.”
CapStar’s financial performance ranks first among all Tennessee-based banks and fourth across the Southeast within S&P Global Market Intelligence’s ranking of banks with assets of $3 billion to $10 billion.
“Over the past 5 years, our team has repositioned CapStar, strengthening its performance and long-term prospects,” said Timothy K. Schools, CapStar President and Chief Executive Officer. “In looking to the next 5 years, it is my belief Old National’s like-minded culture and scale best positions our employees, customers, and shareholders to continue our positive momentum.”
According to a release from Old National, “Under the terms of the merger agreement, each outstanding share of CapStar common stock will be converted into the right to receive 1.155 shares of Old National common stock, valuing the transaction at approximately $344.4 million, or $16.64 per share, based on Old National’s 30-day volume weighted average closing stock price ending October 25, 2023.”
The definitive merger agreement has been approved by the Board of Directors of each company. The transaction remains subject to regulatory approval and the vote of CapStar shareholders. The transaction is anticipated to close in the second quarter of 2024.
