Independent Bank (NASDAQ: INDB) and Meridian Bancorp (NASDAQ:EBSB) signed a definitive merger agreement wherein the former will acquire the latter and Rockland Trust to acquire East Boston Savings Bank.
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Meanwhile, Meridian Bancorp (EBSB) Surpasses Q1 Earnings and Revenue Estimates (Zacks)
Update: Press Release from Rockland Trust
Independent Bank Corp. and Meridian Bancorp, Inc. Sign Merger Agreement for Rockland Trust Company to Acquire East Boston Savings Bank
Transaction would result in Rockland Trust surpassing $20 billion in assets and reinforce Rockland Trust’s position as the Boston area’s premier community-focused commercial bank.
Rockland, Massachusetts and Peabody, Massachusetts (April 22, 2021). Independent Bank Corp. (NASDAQ Global Select Market: INDB) (“Independent”), parent of Rockland Trust Company (“Rockland Trust”), and Meridian Bancorp, Inc. (NASDAQ Global Select Market: EBSB) (“Meridian”), parent of East Boston Savings Bank, have signed a definitive merger agreement for Independent to acquire Meridian and Rockland Trust to acquire East Boston Savings Bank.
The merger agreement provides that each Meridian stockholder will receive 0.2750 of a share of Independent common stock for each share of Meridian common stock. The transaction is intended to qualify as a tax-free reorganization for federal income tax purposes and to provide a tax-free exchange for Meridian stockholders for the Independent common stock consideration they receive.
Independent anticipates issuing approximately 14.2 million shares of its common stock in the merger. Based upon Independent’s $79.57 per share closing price on April 21, 2021, the transaction is valued at approximately $1.15 billion and the aggregate consideration represents 150% of Meridian’s tangible book value. The merger is expected to close in the fourth quarter of 2021 subject to customary closing conditions, including customary regulatory approvals and approvals of Meridian and Independent shareholders.
“This merger is consistent with our strategy of acquiring banks in overlapping and adjacent markets who share our relationship-focused style of banking,” said Christopher Oddleifson, the President and Chief Executive Officer of Independent and the Chief Executive Officer of Rockland Trust. “East Boston Savings Bank has been committed to building meaningful connections with their customers since 1848 and we are excited to work alongside them to deepen those relationships with expanded products, services, and technology. At the same time, we look forward to increasing our presence in and around the city and reinforcing our position as the Boston area’s premier community-focused commercial bank.”
“This transaction brings together two strong banks with a long and rich history serving and investing in our local communities,” said Richard J. Gavegnano, the President and Chief Executive Officer of East Boston Savings Bank. “We are excited to join a like-minded organization dedicated to creating exceptional customer experiences, built on trust and quality service, while also providing an attractive return to our stockholders.”
East Boston Savings Bank was founded in 1848 and conducts its business from 42 full-service locations, one mobile branch and three loan centers in the greater Boston metropolitan area. As of March 31, 2021 Meridian had $6.5 billion in total assets, $5.3 billion in loans, and $5.1 billion in deposits.
“Following this merger, Rockland will have approximately $20 billion in assets. In addition to the market leading commercial lending capabilities, this acquisition will further enhance our core deposit franchise value and allow for the expansion of Rockland’s broad financial product set to an expanded business and consumer customer base,” said Christopher Oddleifson.
Independent anticipates that: the transaction will (i) be approximately 7.9% immediately accretive to tangible book value per share; (ii) be approximately 23% accretive to its 2022 earnings per share, assuming fully phased-in cost saves; and, (iii) generate an internal rate of return of approximately 16%. Combined merger-related charges are expected to be approximately $64 million before tax, in the aggregate, incurred in 2021.
The boards of directors of each company have unanimously approved the transaction. The transaction is subject to certain conditions, including the receipt of required regulatory approvals, approval by the stockholders of both Meridian and Independent, and other customary conditions. Meridian’s directors and executive officers who currently own, in the aggregate, about 3.5% of Meridian Bancorp, Inc.’s outstanding shares have signed voting agreements pursuant to which they have agreed to vote their shares in favor of the merger.