Alabama National soars on $1.6 billion acquisition by RBC Centura; CBS up on plan to buy SignStorey

By Sheri Kasprzak

New York, Sept. 6 - RBC Centura Banks Inc.'s plans to buy Alabama National Bancorp sent shares of the regional bank up more than 45%.

RBC Centura, a Royal Bank of Canada subsidiary, said Thursday it intends to buy Alabama National in a $1.6 billion cash and stock transaction. Half will be paid in cash and the other half in shares.

A sell-side trader said Thursday afternoon that the premium at which RBC plans to buy Alabama National's stock was "enormous" and helped shove up the regional bank holding company's stock.

In other news, CBS Corp. saw its stock climb on Thursday after announcing plans to buy SignStorey, Inc., a distributor of video programming and advertising content to retailers.

The $71.5 million acquisition is a good strategic move, according to one analyst.

"I think it's on board with the rest of their plan to expand their out-of-home enterprise," said the analyst. "It will provide additional exposure for them to advertisers and they will benefit from that substantially."

Elsewhere, shares of La-Z-Boy Inc. made a comeback Thursday after the company announced plans to sell its Pennsylvania House holding to Universal Furniture. The furniture giant known for its iconic recliners plans to sell the furniture arm for an undisclosed amount later this month.

The stock had fallen early in the session after news was released but ended the day on a higher note.

RBC to buy Alabama National

In the RBC transaction, Alabama National watched its stock jump by 45.14%, or $23.98, to close at $77.10 (Nasdaq: ALAB). Volume also jumped with 3,073,397 shares traded compared with the average 191,550 shares.

"That premium is enormous," said a sell-side trader Thursday afternoon when asked about the impact on Alabama National's stock. "It really makes sense for RBC because it's [the Southeast] a huge banking market and to expand its presence there would really make sense."

In the deal, RBC will buy Alabama National's stock at $80 per share, a 51% premium to the company's closing stock price of $53.12 on Wednesday. Pre-market, the stock climbed by 45.4%.

The acquisition is expected to wrap up in early 2008.

Alabama National, headquartered in Birmingham, operates 11 banks in Alabama, Florida and Georgia.

Raleigh-based RBC Centura is a subsidiary of Royal Bank of Canada.

Shares of RBC fell by 31 cents to close at $51.17 on Thursday.

"This acquisition positions RBC Centura even better to serve the banking needs of businesses, business owners and professionals in the Southeast," said Scott Custer, RBC Centura's chief executive officer, in a news release.

"This deal strengthens our ability to reach more customers in the region by expanding our branch network to more than 440 locations, solidifying our market position in Alabama and opening new and important markets in Florida, and increasing our presence in Atlanta."

"I am very pleased to have ANB join forces with RBC," said John Holcomb III, Alabama National's chief, in the news release. "Our company's success over the years can be attributed to the talented individuals we've hired and who have joined us from acquisitions. Similarly, I'm excited about the prospect of future success as our team joins RBC and leverages the cultural and geographic fit between our organizations and as we become part of one of North America's leading financial service organizations."

CBS to buy SignStorey

Heading back to the CBS purchase of SignStorey, the media giant said the purchase is in line with its plans to expand its out-of-home business.

SignStorey will be renamed CBS Outernet once the deal is sealed, sometime in the fourth quarter.

SignStorey provides digital displays to 1,400 grocery stores in major markets, providing advertisers with an outlet to reach consumers, according to a statement released Thursday by CBS.

"CBS Outernet will offer our advertisers a tremendous, broad new platform to reach consumers out of their homes," said Leslie Moonves, CBS' chief executive officer, in a statement.

"This acquisition is highly complementary with many of CBS' content and advertising sales relationships. As we've seen with CBS' outdoor business, the burgeoning use of digital advertising allows great flexibility in tailoring messaging to consumers and can be efficiently controlled from a centralized location. At the same time, retail outlets will now have access to CBS's wide array of national and local entertainment, news and sports content from across the company."

By 11:22 a.m. ET, the stock was up 36 cents. The stock closed up 55 cents, or 1.79%, at $31.36 (NYSE: CBS).

The move, according to SignStorey CEO Virginia Cargill, is beneficial to SignStorey.

"We are extremely pleased to join the CBS family and to continue to develop a more exciting shopping environment in local communities across the United States," Cargill said in a statement. "Our state-of-the-art digital screens give consumers access to information where and when they want it and the addition of CBS content, resources and contacts will make for an even richer experience for retailers, shoppers and advertisers alike."

La-Z-Boy to sell off Pennsylvania House

Elsewhere, La-Z-Boy said it is selling off its Pennsylvania House furniture arm to Universal Furniture.

The recliner maker bought Pennsylvania House in 2000 but has now decided that the company is no longer a good fit.

"While Pennsylvania House has an excellent name and reputation in the marketplace, the company does not fit with La-Z-Boy's overall long-term strategy," said La-Z-Boy CEO Kurt Darrow in a statement.

"Universal is a well-respected to company and will be a natural partner for Pennsylvania House as it moves forward."

"Pennsylvania House is a quality brand with outstanding consumer recognition," said Randy Chrisley, Universal's CEO, in the news release. "That recognition, combined with Universal Furniture's exceptional factory support, provides us with a unique opportunity to expand our ability to meet the changing needs of our customers."

After news of the sell, La-Z-Boy's stock dipped slightly early in the session. The stock ended the day up 22 cents, or 2.19%, to close at $10.25 (NYSE: LZB).

Spartech buys Creative Forming

In other merger news, Spartech agreed to buy Creating Forming Inc. in a $61 million cash transaction.

News of the acquisition sent shares of Spartech down Thursday. The stock was down 69 cents by 11:40 a.m. ET. The stock ended the day off 72 cents, or 3.45%, to close at $20.15 (NYSE: SEH).

"Creative has demonstrated the ability to achieve strong growth and profitability performance while developing key relationships with customers to provide comprehensive design and engineering capabilities," said Spartech interim CEO Randy Martin in a news release.

"Creative provides key technologies to the packaging market and a strong management team to complement Spartech's resources serving this growth market. The Creative acquisition provides the catalyst to focus several of our operations on developing new business and increasing our services to the packaging market. Over the past eight years, we have successfully developed our packaging capabilities in food and consumer containers. Through the development of multi-layer barrier and shelf-stable packaging we have consistently grown our sales in the market and enhanced the value-added packaging solutions we offer our customers."

Creative Forming manufactures plastic packaging in a facility in Ripon, Wis. Spartech, based out of St. Louis, engineers thermoplastic sheet materials, polymeric compounds and concentrates, as well as engineered products.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.