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Carlyle, Oak Hill Partner in North Carolina Bank Deal

Buyout shops Carlyle Group and Oak Hill Capital Partners will invest $155 million in the newly created FNB United Corp., which will bring together North Carolina lenders CommunityOne Bank and Bank of Granite, Reuters reported. Under the terms of the deal, Carlyle and Oak Hill will each own 24.9% of the venture. The combined FNB United will create a North Carolina lender with around $2.9 billion in assets and 63 bank branches, Reuters reported. As part of the deal, Granite shareholders will receive 3.375 FNB United shares for each share held.

(Reuters) – FNB United Corp is to buy Bank of Granite Corp, with private equity firms Carlyle Group and Oak Hill Capital Partners investing $155 million in the combined lender.

Carlyle and Oak Hill will each take a 24.9 percent stake in the new company, FNB United Corp, which will bring together CommunityOne Bank and Bank of Granite to create a North Carolina lender with around $2.9 billion in assets and 63 bank branches.

The investment also depends on the U.S. Treasury exchanging FNB United preferred stock into new shares. FNB United also has to raise a total of $310 million, including the investments by Carlyle and Oak Hill, through a private placement.

As part of the deal, Granite shareholders will receive 3.375 FNB United shares for each share held.

On the basis of 15.45 million Granite shares outstanding, according to Thomson Reuters data, the deal is worth $0.84 a share — a premium of 56 percent to Granite’s Tuesday close, bringing the deal value to around $13 million.

Brian Simpson, former senior executive and operating committee member at First Union Corp, will come in as CEO of the new company.

The deal is expected to close during the third quarter. Ultimately, the merged bank will be called CommunityOne Bank. (Reporting by Sweta Singh in Bangalore, Editing by Ian Geoghegan)