South State in Columbia, S.C., has agreed to merge with CenterState Banks in Winter Haven, Fla.
While South State is the legal acquirer, CenterState shareholders will own 53% of the company, which will operate under the South State brand.
The deal is valued at $3.2 billion, based on the exchange ratio, CenterState’s shares outstanding and South State’s closing stock price on Friday. The merger is expected to close in the third quarter.
South State will have $34 billion in assets and be based in Winter Haven, though the companies said it will maintain “a significant presence” in Columbia; Charleston, S.C.; Charlotte, N.C.; and Atlanta.
John Corbett at Centerstate will remain CEO, while Robert Hill Jr., South State’s CEO, will become executive chairman. Each company will have eight directors on the board.
“Combining these two high-performing teams will allow us to build an even stronger company together,” Corbett said in the release.
“This is a great combination of cultures, which will create tremendous value for our shareholders,” Hill added.
The deal is expected to be 20% accretive to South State’s earnings per share once costs are removed. The companies said they have identified $80 million in annual cost savings, or a tenth of total noninterest expenses, which should be fully phased in by 2022.
It should take less than a year for the company to earn back “minimal” dilution to tangible book value.
Piper Sandler and Wachtell, Lipton, Rosen & Katz advised South State. Keefe, Bruyette & Woods and Davis Polk & Wardwell advised CenterState.
