Blue Ridge Bankshares, Inc. Announces the Signing of Definitive Purchase Agreements for $150 Million in a Private Placement
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The infusion of $150 million in capital through a private placement of common stock by Blue Ridge Bankshares, Inc. is a strategic move aimed at strengthening the bank's financial position. The capital injection is intended to support the bank's strategic initiatives, such as repositioning business lines and enhancing organic growth. These steps are crucial for the bank to maintain competitive in the dynamic financial services industry.
The involvement of experienced bank investor Kenneth R. Lehman and Castle Creek Capital Partners suggests confidence in the bank's future performance and potential for growth. The ownership stakes post-transaction indicate a significant influence on the company's direction, with Lehman and Castle Creek holding considerable portions of the pro forma outstanding common stock.
The planned Asset Resolution Plan following the closing of the transaction is a proactive approach to managing the bank's risk profile, which could improve asset quality and potentially lead to better financial outcomes. However, the execution of such a plan will require careful management to avoid potential negative impacts on the bank's financial health.
The private placement led by Kenneth R. Lehman and Castle Creek Capital Partners is indicative of a broader trend in the banking industry where community banks are seeking ways to bolster capital levels to comply with regulatory requirements and to pursue growth opportunities. The price of $2.50 per share and the issuance of 29.4 million warrants at the same strike price suggest a strategic valuation of the bank's worth and future potential.
The transaction also highlights the increasing role of private investors and equity firms in shaping the banking landscape, particularly for community banks that may not have the same access to capital markets as larger institutions. The expected addition of up to three new investor-appointed representatives to the Board of Directors signifies potential shifts in governance and strategic direction, which could have long-term implications for the bank's operations and performance.
The private placement is subject to regulatory and shareholder approvals, which underscores the importance of compliance with banking regulations and corporate governance standards. The involvement of multiple legal counsel firms, including Williams Mullen and Troutman Pepper Hamilton Sanders, LLP, indicates the complexity of the transaction and the need for specialized legal expertise in securities and banking law.
The transaction's terms, such as the limitations on new investor equity stakes, reflect careful structuring to prevent any single investor from having an outsized influence while still allowing for significant investment and potential control. The legal frameworks governing such transactions are designed to protect all stakeholders, including minority shareholders and ensure the stability and integrity of the financial system.
Capital expected to allow the bank to reposition business lines, support organic growth and further enhance capital levels of the core community bank
Blue Ridge intends to use the capital to help propel its near-term strategic initiatives, which include repositioning business lines, supporting organic growth and further enhancing the core community bank's capital levels, including complying with the bank's previously disclosed individual minimum capital ratios. President and CEO, G. William "Billy" Beale added, "We are delighted to welcome our new shareholders and additional investment from current shareholders. This transaction represents a significant step for our
The Private Placement
Pursuant to the agreements, the Company will issue 60 million new common shares at a price of
The Private Placement is being led by Kenneth R. Lehman, a private investor with many years of experience investing in banks, with participation from Castle Creek Capital Partners VIII L.P. ("Castle Creek"), other new and existing institutional investors, and Blue Ridge directors and officers.
Upon consummation of the Private Placement, Mr. Lehman will own approximately
Following the closing of the Private Placement, the Company, Mr. Lehman and Castle Creek plan to identify certain criticized assets and develop an Asset Resolution Plan. The Asset Resolution Plan will provide a work-out strategy for identified assets for subsequent disposition, work-out, upgrade, or other resolution.
Following the closing of the Private Placement, up to three new investor appointed representatives are expected to join the Board of Directors of Blue Ridge and Blue Ridge Bank.
Advisors on the Offering
Piper Sandler & Co. is acting as sole placement agent for the Private Placement. Williams Mullen is serving as legal counsel to the Company, and Troutman Pepper Hamilton Sanders, LLP is serving as legal counsel to the placement agent. Fenimore Kay Harrison LLP is serving as legal counsel to Mr. Lehman, and Sidley Austin LLP is serving as legal counsel to Castle Creek.
Forward-Looking Statements
This release of Blue Ridge Bankshares, Inc. contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of the Company's beliefs concerning future events, business plans, objectives, expected operating results and the assumptions upon which those statements are based. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance or achievements, and are typically identified with words such as "may," "could," "should," "will," "would," "believe," "anticipate," "estimate," "expect," "aim," "intend," "plan," or words or phases of similar meaning. The Company cautions that the forward-looking statements are based largely on its expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company's control. Actual results, performance or achievements could differ materially from those contemplated, expressed or implied by the forward-looking statements.
The following factors, among others, could cause the Company's financial performance to differ materially from that expressed in such forward-looking statements: (i) the strength of
The foregoing factors should not be considered exhaustive and should be read together with other cautionary statements that are included in filings the Company makes from time to time with the SEC. Any one of these risks or factors could have a material adverse impact on the Company's results of operations or financial condition, or cause the Company's actual results, performance or achievements to differ materially from those expressed in, or implied by, forward-looking information and statements contained in this release. Moreover, new risks and uncertainties emerge from time to time, and it is not possible for the Company to predict all risks and uncertainties that could have an impact on its forward-looking statements. Therefore, the Company cautions not to place undue reliance on its forward-looking information and statements, which speak only as of the date of this release. The Company does not undertake to, and will not, update or revise these forward-looking statements after the date hereof, whether as a result of new information, future events, or otherwise.
Important Information about the Transactions and Where to Find It
Blue Ridge intends to file a proxy statement with the SEC that will be sent to the shareholders of Blue Ridge seeking their approval of the transactions described herein. Security holders are urged to read the proxy statement when it becomes available (and any other relevant documents filed with the SEC in connection with the transactions described herein) because such documents will contain important information regarding Blue Ridge, the transactions, certain investors in the transactions, and related matters.
Security holders may obtain free copies of these documents, once they are filed, and other documents filed with the SEC by Blue Ridge through the website maintained by the SEC at http://www.sec.gov. Investors and security holders will also be able to obtain these documents, once they are filed, free of charge, by requesting them in writing from G. William Beale, Blue Ridge Bankshares, Inc., 1807 Seminole Trail,
Certain investments discussed above involve the sale of securities in private transactions that will not be registered under the Securities Act of 1933, as amended, and will be subject to the resale restrictions under that Act. Such securities may not be offered or sold absent registration or an applicable exemption from registration. This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities, nor shall there be any sale of securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
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SOURCE Blue Ridge Bankshares, Inc.
FAQ
What is the purpose of the Private Placement for Blue Ridge Bankshares, Inc. (BRBS)?
How much is Blue Ridge Bankshares, Inc. (BRBS) expecting to raise through the Private Placement?
Who are the key parties involved in the Private Placement for Blue Ridge Bankshares, Inc. (BRBS)?
What percentage of Blue Ridge's pro forma outstanding common stock will Mr. Lehman own after the Private Placement?