MFNC Stock: Over 35% Increase Pre-Market Explanation 

By Amit Chowdhry ● Apr 13, 2021
  • The stock price of Mackinac Financial Corporation (NASDAQ: MFNC) increased by over 35% pre-market. This is why it happened.

The stock price of Mackinac Financial Corporation (NASDAQ: MFNC) increased by over 35% pre-market. Investors are responding to an announcement that Nicolet Bankshares, Inc. (NASDAQ: NCBS) is buying Mackinac Financial Corporation.

Nicolet Bankshares and Mackinac Financial Corporation had jointly announced the execution of a definitive merger agreement, pursuant to which Nicolet will acquire Mackinac and its wholly-owned banking subsidiary mBank.

Based on the financial results as of December 31, 2020, the combined company is going to have pro forma total assets of $6.1 billion, deposits of $5.2 billion, and loans of $3.9 billion. And Mackinac would represent approximately 25% of the combined company’s year-end assets.

Under the terms of the merger deal, Mackinac shareholders will have the right to receive 0.22 shares of Nicolet’s common stock and $4.64 for each share of common stock of Mackinac Financial Corporation with total consideration to consist of approximately 80% stock and 20% cash. And based upon the closing price of Nicolet Bancshares common stock of $84.40 on April 9, 2021, the implied per share purchase price is $23.21 with an aggregate transaction value of approximately $248 million.

The estimated transaction value is a 1.69 multiple of Mackinac’s tangible book value as of December 31, 2020 and this equates to approximately 18.3x Mackinac’s 2020 earnings per share. 

Following the merger, Paul Tobias will join the Boards of Directors of Nicolet Bankshares and Nicolet National Bank. And all customer-facing employees of Mackinac are expected to stay on in the same capacity.

The deal has been unanimously approved by the boards of directors of both companies. And it is subject to both Mackinac and Nicolet shareholder approval, regulatory approvals and other customary closing conditions and is expected to close in the third quarter of 2021. Upon the consummation of the transaction, Nicolet’s existing branch at 325 W. Pine Street, Eagle River, WI is expected to close and consolidate with continued service out of the legacy mBank office at 400 E. Wall Street, Eagle River, WI.

KEY QUOTES:

“The acquisition of mBank is an important step in Nicolet’s planned growth. This deal is not about expanded geographies but rather about the characteristics of the communities we will serve. Together, we will combine two organizations that understand the positive impact that a strong community bank can make. We look forward to becoming an integral part of the Upper Peninsula and Northern Michigan.”

“We want to offer two initial thoughts when it comes to the question of what’s next. First, we know that scale and efficiencies matter in community banking today. Our customers continue to tell and show us that convenience no longer means a branch on every corner. Second, we understand that actions speak louder than words. We want the communities to know that we are committed to realizing the promise of this acquisition. After the transaction is complete, people will see a strong community bank focused on keeping decisions local. We will build and expand on mBank’s legacy of being a great steward of its communities. Together, we will find the best ways to serve to become the lead-local community bank.”

— Mike Daniels, President and CEO of Nicolet National Bank

“On behalf of our Board of Directors, I am pleased to announce our merger into the Nicolet family. We have found a strategic partner that is a true community bank with deep commitments to the markets we serve. The market cultures of our respective organizations mesh well, and the greater lending access will strengthen our value to current and prospective customers. This deal represents a fair transaction that unlocks shareholder value for us both.”

— Paul Tobias, Chairman and CEO of Mackinac

“Nicolet always takes the long view when it comes to acquisitions. This deal with Mackinac represents a unique and sizeable opportunity to expand Nicolet’s franchise across a greater Northern footprint, while at the same time, being highly accretive to long-term shareholder value. It also opens up the possibility for future expansion into the state of Michigan, if and when the opportunity arises.”

— Bob Atwell, CEO and Chairman of Nicolet

“In Nicolet, we have found a strategic partner who shares our vision of being people-driven and community-centric. Together, we will continue to deliver personal and timely decisions through local bankers who are a part of the communities we serve. Maintaining and creating strong relationships will continue to be the value we bring to our customers.”

— Kelly George, President and CEO of mBank

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.