Heritage Southeast Bancorporation, Inc. Enters into Agreement to be Acquired by VyStar Credit Union

Rhea-AI Summary

Heritage Southeast Bancorporation, Inc. (HSBI) has entered into a definitive agreement for VyStar Credit Union to acquire assets and assume liabilities of Heritage Southeast Bank in an all-cash transaction. VyStar is expected to pay HSBI an estimated total of $27.00 per share for distribution to shareholders. The transaction, approved by both boards, is expected to close in late 2021, pending shareholder and regulatory approvals. Following the acquisition, HSBI will wind down its operations, distributing remaining assets to stockholders.

Positive

• Expected cash distribution of $27.00 per share to HSBI shareholders post-transaction.
• The acquisition enhances VyStar's asset base, increasing total assets to approximately $12.5 billion and expanding its market presence.

Negative

• Potential costs related to winding down operations could affect the final cash distribution to shareholders.
• Risks associated with obtaining necessary regulatory and shareholder approvals.

ATLANTA, March 31, 2021 (GLOBE NEWSWIRE) -- Heritage Southeast Bancorporation, Inc. (“HSBI”) announced today that HSBI and Heritage Southeast Bank have signed a definitive purchase and assumption agreement whereby VyStar Credit Union (“VyStar”) will acquire the assets and assume the liabilities of Heritage Southeast Bank in an all-cash transaction. Following the completion of this transaction, HSBI and Heritage Southeast Bank will wind down their operations and their remaining assets, after all obligations are settled, will be distributed to HSBI stockholders.

Under the terms of the purchase and assumption agreement, VyStar will pay HSBI an aggregate amount estimated to provide HSBI with sufficient cash to have $27.00 per share in cash available for distribution to its shareholders after satisfaction of all of HSBI’s unconsolidated debt and any other obligations (the “per share consideration”). The per share consideration available to HSBI shareholders is subject to variations based on costs related to winding down Heritage Southeast Bank and HSBI and distributing the remaining assets to stockholders, including satisfaction of liabilities related to the liquidation accounts maintained by Heritage Southeast Bank, satisfaction of certain indebtedness, satisfaction of certain tax amounts, and termination of certain contracts, among others.

The transaction has been unanimously approved by the board of directors of each party and is expected to close late in 2021, subject to customary closing conditions, the approval of HSBI stockholders, and obtaining regulatory approvals. The distribution of cash to HSBI stockholders is expected to occur shortly following completion of the sale of assets to VyStar.

HSBI, based in Jonesboro, GA, was created in August 2019 and serves as the holding company for Heritage Southeast Bank, which operates under the names Heritage Bank, Providence Bank, and The Heritage Bank in its various markets. HSBI has $1.5 billion in assets and 22 branch locations including Jacksonville, Southeast Georgia and Savannah, as well as the South and North Metro Atlanta areas.

“Through the unique structure of this acquisition by VyStar, we believe we are maximizing value to our stockholders. We look forward to working with VyStar to continue our tradition of fostering relationships to best serve our customers and having a positive impact in our local communities,” said Leonard Moreland, CEO of HSBI.

When finalized, the acquisition will bring VyStar’s total assets to approximately $12.5 billion, full-service branches to over 85 and members to more than 850,000. Nationally, VyStar will move to the 13th-largest credit union in the country by asset size.

Hovde Group, LLC served as financial advisor and provided a fairness opinion and Bryan Cave Leighton Paisner LLP served as legal counsel to HSBI in the transaction. Raymond James & Associates served as financial advisor and McGuireWoods served as legal counsel to VyStar in the transaction.

About Heritage Southeast Bancorporation, Inc. and Heritage Southeast Bank:
Heritage Southeast Bancorporation, Inc. (OTCQX: HSBI) serves as the holding company for Heritage Southeast Bank, which is headquartered in Jonesboro, GA and operates under the names “Heritage Bank,” “The Heritage Bank,” and “Providence Bank” in its various markets. With approximately $1.5 billion in assets, the bank provides a well-rounded offering of commercial and consumer products through its 22 locations. For additional information, visit the HSBI website (myhsbi.com).

A proxy statement containing important information about the proposed transaction will be mailed to the shareholders of HSBI. The shareholders of HSBI are urged to read this proxy statement, which will include the agreement, and other related documents (including any amendments or supplements), carefully when it becomes available.

Forward Looking Statements: 
This press release contains forward-looking statements. These forward-looking statements include, but are not limited to, statements about the benefits of the proposed acquisition of HSBI by VyStar, statements related to the expected timing of the completion of the acquisition, the combined company's plans, objectives, expectations and intentions, and other statements that are not historical facts.  Forward-looking statements may be identified by terminology such as "may," "will," "should," "scheduled," "plans," "intends," "anticipates," "expects," "believes," estimates," "potential," or "continue" or negatives of such terms or other comparable terminology.  All forward-looking statements in this press release, or in any other written or oral communication that relates to the proposed acquisition or to matters that may affect such proposed acquisition are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of HSBI or VyStar to differ materially from any results expressed or implied by such forward-looking statements. Such factors include, among others, (1) disruption from the proposed acquisition with customers, suppliers, employees or other business partners, (2) the occurrence of any event, change or other circumstances that could give rise to the termination of the agreement, (3) the failure to obtain the necessary approvals by the shareholders of HSBI, (4) the ability by the parties to obtain required governmental approvals of the acquisition (5) the failure of the closing conditions in the agreement to be satisfied, or any unexpected delay in closing the acquisition, and (6) general competitive, economic, political and market conditions.

HSBI disclaims any obligation to update or revise any forward-looking statements contained in this communication (which statements speak only as of the date hereof), or in any other written or oral communication that relates to the proposed combination or to matters that may affect such proposed combination, whether as a result of new information, future events or otherwise.

Media Contacts:
Kevin McAuliffe
971-244-2555
kevinm@theIRgroup.com
and
Pat Check
770-789-6051
pat@latitude34pr.com

FAQ

What is the acquisition value of HSBI by VyStar?

VyStar will acquire HSBI assets for an estimated $27.00 per share.

When is the HSBI and VyStar acquisition expected to close?

The transaction is expected to close in late 2021, subject to approvals.

How will the acquisition affect HSBI shareholders?

HSBI shareholders are expected to receive $27.00 per share after the transaction.

What are the main risks associated with the HSBI acquisition by VyStar?

Risks include the need for approval from HSBI shareholders and regulatory bodies.