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Jacksonville Bancorp Inc. CEO Kendall Spencer
Jax Daily Record Monday, Oct. 5, 201512:00 PM EST

Ameris, Jacksonville Bank fit 'like a hand in glove'

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by: Mark Basch Contributing Writer

As far as Jacksonville Bancorp Inc. CEO Kendall Spencer sees it, his bank’s proposed acquisition by Ameris Bancorp fits his employees and customers “like a hand in glove.”

Ameris announced its $96.6 million agreement to buy the parent company of The Jacksonville Bank on Thursday.

“The cultural fit — which is important to me — with Ameris Bank could not be better,” Spencer said during a conference call with Ameris executives and analysts.

Ameris is officially headquartered in Moultrie, Ga., but the company has announced plans to move its top executives to offices in the Riverplace Tower on Jacksonville’s Southbank by Jan. 1. The bank will also put the Ameris name on top of the 28-story tower.

“The timing of this announcement is excellent for our company with the relocation of our executive team to Jacksonville just in the last few months,” Ameris CEO Edwin Hortman said during the conference call.

The addition of Jacksonville Bank will put Ameris in “an enviable market position” in Northeast Florida, he said, as it basically moves its headquarters to Jacksonville.

Ameris will have 101 branches in four states after completing the deal, but Jacksonville will be a key market.

“The current team in Jacksonville is outstanding and has produced results that put them near the top of our company in almost everything we measure,” Hortman said.

“Combining those forces with the Jacksonville Bank team is really exciting because I believe that momentum is something that we can not only leverage but grow with the larger team and recognition that will result from the deal,” he said.

After the merger, Ameris will have 40 percent of its deposit base in Florida and 49 percent in Georgia. It has smaller market shares in South Carolina and Alabama.

Ameris said there is some overlap between Ameris and Jacksonville Bank branches in Northeast Florida, but the only planned closure right now will be Jacksonville Bank’s downtown office.

Kraton stock falls on Arizona Chemical deal

The Ameris-Jacksonville Bancorp deal was the second acquisition of a Jacksonville-based company announced last week. Kraton Performance Polymers Inc. announced a $1.37 billion deal to buy privately held Arizona Chemical Holdings Corp., which has headquarters offices in Jacksonville and in the Netherlands.

Kraton’s stock dropped by $1.31 to $17.04 last Monday after the deal was announced, apparently on concern about the debt Houston-based Kraton will take on to fund the $1.37 billion cash price.

Moody’s Investors Service on Tuesday placed Kraton’s corporate debt rating under review for possible downgrade, because of the expected increase in debt.

However, if Kraton’s projections are right, the addition of Arizona Chemical will significantly increase its earnings. Kraton said the deal will add $1.40 a share to annual earnings once the deal is completed.

The average analysts’ forecast for Kraton’s 2016 earnings had been $2.23 a share before the acquisition was announced, according to Thomson Financial.

SunTrust Robinson Humphrey analyst Jason Freuchtel said in a research note that Kraton could earn $6 a share by 2018, so the stock was trading at less than three times its projected future earnings after the merger announcement. Freuchtel has a “buy” rating on the stock.

“We believe the transaction is consistent with Kraton’s previously stated M&A objective of ‘developing strategic platforms complementing its current business,’“ Freuchtel said in his report.

Kraton, which produces engineered polymers, said Arizona Chemical’s pine-based chemical products are a good fit for its business. Freuchtel said the deal has potential to grow sales.

“As over 50 percent of Arizona Chemical’s sales are represented by markets currently served by Kraton, the combined entity should strengthen relationships with its current overlapping customer base and look to expand sales into customers not currently served by each company,” he said.

Arizona Chemical has no manufacturing facilities in Northeast Florida, only the U.S. headquarters office.

A Kraton spokeswoman said by email last week that the company will not discuss details of Arizona Chemical facilities before the acquisition closes and they become part of Kraton.

Local banks lead the stock pack

Interestingly, in light of the Thursday morning merger announcement, Jacksonville Bancorp was the best-performing stock among Jacksonville-based companies in the third quarter, which ended late Wednesday afternoon.

In what was an overall bad quarter for the market, Jacksonville Bancorp’s stock jumped 27.5 percent. That indicates that somebody was speculating about a possible buyout before the deal was announced.

Adding even more intrigue to that was a jump in Jacksonville’s other publicly traded community bank, Atlantic Coast Financial Corp., which rose 24.9 percent in the third quarter.

No other Jacksonville-based company came close to those two. The third best performance in the quarter came from Fidelity National Information Services Inc., which rose 8.5 percent after announcing an agreement to buy SunGard in a deal that is expected to increase its earnings.

The major stock indexes recorded their biggest quarterly losses in four years during the third quarter, with the Dow Jones industrial average dropping 7.6 percent and the Standard & Poor’s 500 index falling 7 percent. So it’s not surprising that most Jacksonville-based companies fell during the quarter.

By far the biggest loss, not counting stocks that trade for less than $1, was a 62.4 percent drop for Rayonier Advanced Materials Inc., which announced a contract dispute that could disrupt sales to its largest customer.

Fidelity completes J. Alexander’s spinoff

Fidelity National Financial Ventures recorded a big drop in the quarter, but that was mainly because it completed the spinoff of restaurant company J. Alexander’s Holdings Inc. last week.

FNFV is a tracking stock for the non-real estate-related investments of Jacksonville-based Fidelity National Financial Inc. The company distributed its 87.4 percent ownership stake in J. Alexander’s to FNFV shareholders last Monday.

FNFV stockholders received 0.17271 shares of J. Alexander’s for every FNFV share they owned.

FNFV’s stock dropped from $13.03 at Monday’s close to $11.25 when trading opened Tuesday, reflecting the loss of value of the J. Alexander’s shares.

J. Alexander’s stock, which also trades on the New York Stock Exchange, opened at $10.25 when trading began Tuesday morning, and the stock remained near the $10 level for the rest of the week.

Stein Mart sees drop in comp sales

Stein Mart Inc. said Friday that September sales have been “sluggish” and it expects comparable-store sales for the five weeks ended Oct. 3 will show a decline by a low single-digit percentage.

Comparable-store sales are sales at stores open for more than one year and are considered a key indicator of a retailer’s performance.

The Jacksonville-based fashion retailer said in a news release that one less week of post-Labor Day selling of fall fashions, a shift of promotional events and unseasonably warm weather impacted September sales.

“We clearly have the right merchandise in place to have a successful fall season once cooler weather arrives,” CEO Jay Stein said in a news release.

Nexstar pursues Media General

Nexstar Broadcasting Group Inc. bought Jacksonville CW network affiliate WCWJ TV-17 from Media General Inc. six years ago. Now Nexstar is going after the rest of Media General.

Texas-based Nexstar announced an unsolicited $4.1 billion offer to buy Media General, saying that Media General had rebuffed its efforts to negotiate a deal.

The Nexstar offer came three weeks after Virginia-based Media General announced an agreement to buy Meredith Corp., another media company that owns magazines in addition to television stations.

Media General sold off its newspaper business in 2012 to focus on broadcasting, and the deal with Meredith has received harsh criticism from some investors who don’t want to see the company get back into publishing.

A Nexstar-Media General merger would create a company with 162 television stations in 99 markets, and Nexstar CEO Perry Sook says it would be a better deal for Media General shareholders.

“Given the compelling strategic and financial value of a combination, it is illogical that Media General’s board has refused to engage with us and has instead pursued an ill-conceived and value-destructive acquisition of Meredith that would once again expose Media General shareholders to the risks of the low-margin publishing business,” Sook said in a news release.

Media General said in a statement that its board of directors “will carefully review and consider the (Nexstar) proposal to determine the course of action that it believes is in the best interests of the company and its shareholders.”

Safariland acquires majority stake in Rogers Holster

The Safariland Group, a Jacksonville-based manufacturer of law enforcement equipment, announced last week that it acquired a 65 percent interest in another Jacksonville company called Rogers Holster Co. LLC.

Rogers designs and manufactures firearm accessories, including holsters.

The company will remain headquartered in Jacksonville under the leadership of founder Bill Rogers.

The deal includes options for Safariland to buy the remaining 35 percent of Rogers from other company employees. Financial terms of the deal were not disclosed.

Safariland was formerly owned by Armor Holdings Inc. before Armor was acquired by BAE Systems in 2007. Former Armor Chief Executive Warren Kanders then bought Safariland back from BAE in 2012.

APR Energy gets extension from banks

APR Energy plc last week said it received a one-month extension until Oct. 31 from its banks to discuss a renegotiation of its loan terms.

The Jacksonville-based company, which builds interim power plants around the world, had previously said it was in danger of breaching certain loan covenants on Sept. 30 after recent losses. The company has had to write off assets after pulling out of projects in some risky overseas countries.

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