Bendigo and Adelaide Bank's acquisition of Bank of Cyprus Australia will give it access to a business banking distribution network in New South Wales, Victoria and South Australia.On Friday, Bendigo and Adelaide announced it had reached agreement with the Bank of Cyprus Group to acquire its Australian subsidiary for around A$130 million.It is a relatively small deal. Bank of Cyprus Australia will add $1.4 billion to Bendigo and Adelaide's loan book - an increase of just 2.7 per cent to the group's $47.7 billion loan portfolio.However, 44 per cent of these loans are classified as business and 19 per cent as commercial. Bank of Cyprus Australia has 30 business bankers operating out of 14 branches.Almost all of Bank of Cyprus' loans are secured by residential or commercial property and the bulk of the bank's funding has come from retail deposits.To put the Bank of Cyprus' business in perspective, there are 14 mutual banks, credit unions and building societies with an asset base greater than that of a typical niche foreign bank.Bank of Cyprus Australia said in a statement that it would operate as a stand-alone entity. However, this may not be the long-term plan; Bendigo and Adelaide Bank said it had permission to use the Bank of Cyprus brand for a period of 12 months after completion of the deal.Bendigo and Adelaide said it was committed to an expansion of the Bank of Cyprus branch network that is already underway.On Friday the bank undertook a fully underwritten $120 million institutional share placement to fund the purchase. The Age reported today that this may be upsized, and also that there will be a $70 million share offer to existing retail shareholders. Bank of Cyprus has been profitable for the past eight years. It reported net profits of $6.6 million for 2010.It was the bank's most successful year of operation in Australia, with a 44 per cent increase in deposits, a 34 per cent increase in loans and a 22 per cent increase in customer accounts.Bendigo and Adelaide Bank chief executive Mike Hirst said there was scope to improve the earnings of the business through "funding and operational synergies".Accompanying the deal announcement was an update of Bendigo and Adelaide's earnings guidance. The bank said it expected "performance consistent with the previous corresponding period, despite a difficult operating environment."