Great Western Bancorp, Inc. has announced in a press release that it will be acquiring HF Financial Corp. for approximately $139.5 million in a cash and stock transaction.
The acquisition of HF Financial, the holding company and parent of Home Federal Bank, solidifies Great Western's market leadership in Sioux Falls.
Great Western said in the press release that the acquisition of HF Financial will provide a strong platform to support significant opportunities for organic growth in the Midwest.
The acquisition will enhance its state-wide presence in South Dakota and provide branch presence in Fargo, North Dakota and the Minnesota markets.
Ken Karels, the president and CEO of Great Western Bank, said in the press release that they are pleased with "the acquisition of Home Federal Bank."
"This acquisition offers us the opportunity to expand our footprint and customer base by complementing our existing branch network presence in Eastern South Dakota and adding locations in attractive markets in Fargo, North Dakota and Minnesota," he said.
Argus Leader said that consolidations will be implemented, which is expected to happen next summer, following the merger of the two companies.
Home Federal Bank has seven branches in Sioux Falls while Great Western has five.
Argus Leader adds that the branches to be closed are Great Western's locations at Sixth Street and Sycamore Avenue, 41st Street and Sycamore Avenue, and the downtown River Centre branch.
Home Federal plans to close its branch inside Hy-Vee at 26th Street and Marion Road.
Stephen Bianchi, the president and CEO of Home Federal, told Argus Leader that it hasn't been determined yet "the number of potentially affected employees."
He also said that the company will be managing its "staffing through attrition where possible."
Argus Leader adds that Great Western has 300 employees in Sioux Falls while Home Federal has 205.
Under the terms of the agreement, 75 percent of HF Financial's common stock will be converted to Great Western common stock, while the remaining 25 percent will be paid in cash, according to the press release.
Shareholders of HF Financial common stock will have the option to elect to receive either 0.6500 shares of Great Western common stock or $19.50 in cash for each share of HF Financial.
Great Western adds in the press release that they expect the transaction to qualify as a tax-free exchange with respect to shares of HF Financial common stock that are exchanged for Great Western common stock.
The transaction is expected to close in the second quarter of 2016.
