(By Balaseshan) Jacksonville Bancorp Inc. (NASDAQ: JAXB) announced
the closing of a $50 million capital raise led by CapGen Capital Group
IV LP under a definitive amended and restated stock purchase agreement.
The agreement provides for the issuance of 50,000 shares of JAXB
Series A Mandatorily Convertible, Noncumulative, Nonvoting, Perpetual
Preferred Stock to accredited investors at a purchase price of $1,000
The $50 million capital raise includes the $5 million investment by
CapGen previously announced by JAXB in September, and also includes
investments by various JAXB directors and officers.
[Related -Merger Arbitrage Mondays – June 28, 2010]
O'Neill + Partners, L.P. acted as sole placement agent for the stock
purchase transaction. The net proceeds of the offering are expected to
be used primarily to support the capital of the Bank.
Each share of Series A Preferred Stock is expected to mandatorily
convert into about 2,000 shares of JAXB's voting common stock and/or a
new class of nonvoting common stock at an initial conversion price of
$0.50 per share, for a total issuance of about 100 million new shares of
common stock upon conversion of the outstanding Series A Preferred
JAXB's shareholders will also be asked to approve an increase in the
authorized shares of JAXB voting common stock and the authorization of a
new class of nonvoting common stock, in order to effect the conversion
of the Series A Preferred Stock. JAXB expects to hold a special meeting
of shareholders in early 2013.
[Related -Merger Arbitrage Mondays – June 21, 2010]
Immediately prior to the closing of the capital raise, the Bank sold
about $25.1 million of classified assets, other loans and other real
estate owned for about $11.7 million. The asset purchaser was also an
investor in the capital raise. Sandler O'Neill Mortgage Finance L.P., an
affiliate of Sandler O'Neill + Partners, L.P., acted as exclusive
financial advisor to JAXB in connection with the asset sale.
JAXB is trading down 2.28% at $0.86 on Monday. The stock has been trading between $0.75 and $3.65 for the past 52 weeks.