Three private equity firms are near a deal to inject $800 million into a small Florida bank, giving them control of a healthy lender that could be used as a vehicle for acquiring more banks, people familiar with the situation told Reuters Thursday.
Under a preliminary deal expected to be announced Thursday,
With the investment, First Southern could start gobbling up troubled banks in Florida. People familiar with the deal expect the bank could grow to at least $5 billion in assets.
The three investment firms would collectively hold a majority stake of $450 million, through individually the firms would remain below the 25 percent threshold that would then trigger Federal Reserve oversight.
Investment bank KBW Inc would raise an additional $350 million from institutional investors, the sources said.
Fortress, Lightyear and Crestview each would have equal shares and board representation. The investment group plans to install Gene Taylor, a former senior Bank of America executive, as First Southern’s chief executive.
Taylor was a longtime lieutenant to former BofA chief Hugh McColl, asked to oversee the integration of dozens of banks acquired by NationsBank and later Bank of America, particularly in the U.S. Southeast.
First Southern’s board is expected soon to approve a nonbinding term sheet and grant the investors an exclusive 60-day window to hammer out a definitive agreement, sources familiar with the deal said.
Fortress is one of the world’s largest private equity and hedge fund managers. The New York firm’s founders Wes Edens and Pete Briger 20 years ago snapped up assets at distressed prices following the collapse of the U.S. savings and loan industry. Fortress did not return calls seeking comment.
Lightyear is led by Donald Marron, the former chief executive of PaineWebber Group, once one of the largest U.S. wealth management companies. Marron in November told Reuters his firm was hunting for bank and insurance company deals.
Crestview, founded five years ago by former Goldman and Morgan Stanley executives, is a private equity firm that manages $4 billion and seeks contrarian investments.
Last week a group of investors led by
Five months ago, private investors bought the assets of failed bank IndyMac Bancorp from the U.S. Federal Deposit Insurance Corporation.
But First Southern is not a distressed bank, the sources said, and boasts a clean balance sheet.
Investors in BankUnited have a loss-sharing agreement with the U.S. government, though the bank’s new owners still must try to sort out its troubled assets.
(Reporting by Joseph A. Giannone, editing by Dave Zimmerman and Gerald E. McCormick)