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Jacksonville Bancorp (JAXB) Closes $50M Capital Raise

 December 31, 2012 12:13 PM

(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 per share.

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]

Sandler 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 Stock.

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.



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