Farmers & Merchants Bancorp agreed to acquire Bank of Rio Vista, subject to customary closing conditions, including regulatory approvals and Bank of Rio Vista’s shareholder approval. The boards of directors of both companies unanimously approved the transaction, which is expected to close in Q3/18.
As a result of the merger, Bank of Rio Vista and its three, California-based service branches will become wholly-owned subsidiaries of Farmers & Merchants Bancorp, alongside Farmers & Merchants Bank of Central California.
At close, the shareholders of Rio Vista owning 2,414 shares, or 60.35% of the outstanding common shares, will receive $28.7 million in cash subject to certain adjustments defined in the agreement. Over the past year, Farmers & Merchants acquired 1,586, or 39.65%, of the outstanding common shares of Rio Vista for $12 million. As a result, the total price paid for all common shares of Rio Vista will be $40.7 million. Farmers & Merchants expects the acquisition to be accretive to earnings in 2019, the first full year of combined operations.
Dave Greiner, chairman, CEO and director of Bank of Rio Vista, will work with Farmers & Merchants as an advisor through the integration process. One member of the Rio Vista board of directors is expected to join the board of Farmers & Merchants Bank, while an advisory board, comprised of existing Rio Vista directors, will be established for the Rio Vista, Delta and River communities in Central California.
Farmers & Merchants Bancorp’s Chairman, President and CEO Kent Steinwert said, “It is a tremendous honor to join these two century-old institutions, both with strong ties to their communities and a long history of reinvesting back into their markets to improve the quality of life for all residents. On behalf of our board of directors and executive management team, I extend a warm welcome to the Bank of Rio Vista customers and employees.”
Pillsbury Winthrop Shaw Pittman acted as legal counsel for Farmers & Merchants Bancorp on the transaction, while D.A. Davidson & Co. acted as financial advisor and Weintraub Tobin as legal counsel for Bank of Rio Vista.
