Brand Group Holdings Announces Significant Investment Agreements for New Capital

LAWRENCEVILLE, Ga., Nov. 1, 2010 /PRNewswire/ -- Brand Group Holdings, Inc. (Brand Group), which is the parent holding company of The Brand Banking Co. (Brand Bank), announced today that Brand Group has entered into agreements that contemplate the investment of up to $200 million in capital.  

As part of the first phase of investment, agreements have been signed with affiliates of The Carlyle Group (Carlyle), The Stephens Group, LLC, the Cousins family's Nonami LLC and various individual Atlanta investors. The proceeds will be used to strengthen Brand Bank's balance sheet and provide capital for general corporate purposes.

As part of the transaction, John E. McKinley, III, will become a Brand Group investor and Executive Chairman of Brand Group and Brand Bank. Mr. McKinley was Principal Operating Officer for BankSouth Corp. in the 1990s prior to its sale to Bank of America.  Patrick Flinn, former CEO of BankSouth, will become an independent board member of Brand Group pending regulatory approval.

Bartow Morgan Jr. will continue to serve as CEO of both Brand Group and Brand Bank. Morgan and his management team began assembling this transaction more than a year ago.  

"Through this agreement, Brand Group is taking an important step to strengthen its capital base and position Brand Bank to continue its 105-year tradition as one of the leading community banks in the metro-Atlanta market.  We are excited that we have attracted such a quality team of investors and management partners to help us grow," Mr. Morgan said.

"We will always uphold the values and characteristics that have historically made Brand Bank such a strong and successful institution. Brand Bank remains committed to the roots it established more than a century ago. The Brand/Morgan family will remain significant shareholders. Indeed, we and certain members of management will invest more in the company as part of these transactions," he added.

Since it opened in 1905, Brand Bank has been a cornerstone financial institution in Gwinnett County, Georgia. Brand Bank was founded by Bartow Morgan's great, great grandfather E.M. Brand, and has been closely held by the family and a small group of local investors for its entire history. The Bank has assets of more than $1.2 billion, serving businesses, municipalities and individuals in one of Metropolitan Atlanta's fastest growing areas.

"I believe that the contemplated transactions provide a great opportunity to build upon Brand Bank's long history," said Mr. McKinley, the incoming Executive Chairman. "I am looking forward to working with Bartow Morgan."

Transaction Details

The investment agreements contemplate investments in private transactions of up to $200 million in additional capital in Brand Group. Initially, investors will purchase approximately $125 million in a transaction expected to close in the first quarter of 2011. Further investments of up to $75 million may be made in the next two years.

These investments are subject to closing conditions, including, among others, receipt of shareholder and regulatory approvals, obtaining additional capital commitments in private transactions, the absence of any material adverse effect on Brand Group prior to closing, and the satisfaction of certain conditions with respect to Brand Group's financial condition.

As a result of the transaction, new directors will be elected, including:

• Representatives from Carlyle, Stephens Group and Nonami LLC

• John E. McKinley, III

• Three independent board members, including Patrick Flinn

Current Brand Group directors Bartow Morgan Jr. and Brand Morgan, CEO of Brand Properties, will remain on the board; while current Brand Bank directors Richard Tucker and Jim Henderson will be elected to the Brand Group board.  The Brand Bank's board of directors will continue to serve the bank.

About The Carlyle Group - Carlyle is a global alternative asset manager with $90.9 billion of assets under management committed to 66 funds as of June 30, 2010. This is Carlyle's first investment in a Georgia-based bank.

About The Stephens Group, LLC – The Stephens Group is a private, family-owned firm based in Little Rock, Ark., that invests its capital in private and public companies with exceptional management teams working with outstanding partners across a broad platform of companies in multiple industries.

About Nonami LLC – Nonami LLC is a private company owned by the Cousins family. Tom Cousins is Chairman Emeritus and Founder of Cousins Properties Inc., a leading real estate company in Atlanta.

Sunrise Securities Corp. and law firms Bryan Cave LLP and Mahaffey Pickens Tucker LLP represented Brand Group. Other law firms serving as advisors to the transaction were Simpson Thacher & Bartlett LLP (Carlyle), Womble Carlyle Sandridge & Rice, PLLC (Stephens Group) and Alston & Bird LLP (Nonami LLC), and Jones Day (McKinley and other investors).

The securities to be offered in the transactions described in this release will not be registered under the Securities Act of 1933 or any state securities laws and may not be offered or sold in the United States absent such registration or an applicable exemption from such registration requirements.  This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities, in any jurisdiction or state in which such offer, solicitation or sale would be unlawful.

About Brand Group Holdings Inc. and The Brand Banking Co.

Brand Group Holdings Inc. is the $1.2 billion bank holding company for The Brand Banking Company, a full service bank serving the needs of individuals and businesses in Gwinnett County and North Metro Atlanta.

Brand Bank was chartered in 1905, and is the oldest locally owned bank in Gwinnett, combining old-fashioned personal service with the benefits of modern technology. The Brand Banking Co. is led today by founder E.M. Brand's great great grandson, Bartow Morgan Jr.

In addition to operating branches in Lawrenceville, Grayson, Snellville, Flowery Branch, Buford and Duluth, Georgia, Brand Bank also has a loan production office in the Buckhead area of Atlanta, and mortgage offices throughout Georgia, Alabama and Tennessee.

SOURCE Brand Group Holdings, Inc.