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Bank of the Ozarks and Bank of the Carolinas sign definitive merger agreement for about USD64.7m.

M2 EQUITYBITES-May 7, 2015-Bank of the Ozarks and Bank of the Carolinas sign definitive merger agreement for about USD64.7m

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Bank of the Ozarks Inc (OXRK) (NASDAQ:OZRK) and Bank of the Carolinas Corporation (BCAR) (OTC Pink:BCAR) jointly disclosed on Wednesday that a definitive agreement and plan of merger and reorganization (agreement) was signed by both companies, whereby OZRK will acquire BCAR and its wholly-owned bank subsidiary, Bank of the Carolinas, in an all-stock transaction valued at about USD64.7m or about USD0.14 per BCAR share, subject to potential downward adjustments under the agreement.

The transaction will close and be immediately profitable to OZRK's book value per common share and its tangible book value per common share, the company said and that the transaction will be neutral to slightly profitable to its diluted earnings per common share without the transaction costs, for the first twelve months after the transaction closes.

BCAR operates eight offices in North Carolina and had about USD363m of total assets, USD279m of loans and USD314m of deposit as of 31 March 2015. Pursuant to the agreement approved by the respective boards of directors, each holder of outstanding shares of BCAR common stock will receive shares of OZRK common stock and the number of OZRK shares to be issued will be determined based on its ten day average closing stock price as of the second business day before the closing date, subject to a minimum and maximum price of USD29.28 and USD48.80, respectively.

The companies said BCAR will merge into OZRK and Bank of the Carolinas will merge into OZRK's wholly-owned bank subsidiary, Bank of the Ozarks when the transaction closes, which is subject to certain closing conditions such as customary regulatory approvals and approval by BCAR's shareholders. When the transaction closes in the third quarter of 2015, then this will be OZRK's thirteenth acquisition since March 2010, it added.

FIG Partners was financial advisor to BCAR and Wyrick Robbins Yates & Ponton LLP was legal counsel, while OZRK was represented by the law firm of Kutak Rock LLP.

OZRK with USD8.3bn in total assets as of 31 March 2015, owns a state-chartered subsidiary bank that conducts banking operations through 165 offices in nine US states.

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Publication:M2 EquityBites (EQB)
Date:May 7, 2015
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