Old National to Buy Founders in Mich. for $88 Million

Old National Bancorp in Evansville, Ind., has agreed to acquire Founders Financial in Grand Rapids, Mich., for $88.2 million in cash and stock.

Old National said Monday that it would pay $38 in cash and exchange 3.25 shares of its common stock for each share of the privately held Founders, which has $466 million of assets. Based on the most recent closing price of Old National stock of $13.87 per share, the deal values Founders' common stock at $83.08 per share. However, the price could change as Old National's share price fluctuates.

Both companies' boards have approved the deal. The deal is expected to close in the first half of 2015.

The $10.4 billion-asset Old National has been one of the industry's most-aggressive acquirers this year. In June, Old National agreed to buy the $366 million-asset LSB Financial in Lafayette, Ind., and in January it agreed to acquire the $919 million-asset United Bancorp in Ann Arbor, Mich.

The Founders deal would give Old National its first branches in the Grand Rapids area. Founders, founded in 1991, operates four branches of its Founders Bank & Trust in the Grand Rapids area.

Sandler O'Neill & Partners was financial adviser to Old National and Krieg DeVault was its legal counsel. Donnelly Penman & Partners was Founders' financial adviser and Warner Norcross & Judd was its legal counsel.

Also on Monday, Old National reported that its second-quarter profit fell 34% to $18.8 million, or 18 cents per share, from a year earlier. Results from the most-recent quarter included a $10.5 million "unfavorable pretax change" in its indemnification assets, and $6.3 million of merger and integration expenses.

Old National's shares were down 2.1% in early trading Monday, to $13.58.