Eastern Bank will acquire Bedford, N.H.-based Centrix Bank in an all-cash $134 million deal expected to close around the end of this summer, the bank announced today.
Under the terms of the transaction, shareholders of Centrix will be entitled to receive $41 in cash in exchange for each share of Centrix common stock – a 49 percent premium over Monday afternoon’s closing price of $27.50 per share.
The acquisition doesn’t necessarily mark Eastern’s first foray across state lines, Chairman and CEO Rich Holbrook said today. Eastern Bank has already done a bit of small business lending in New Hampshire, has insurance operations there and works with several auto dealerships in the state.
But Eastern has kept an eye on Centrix Bank since its inception in 1998 and when the $909 million bank started seeking a buyer early this year, the Boston bank pounced on the opportunity, Holbrook said.
"Centrix has been primarily a commercial bank. Their retail presence is relatively small. Their retail customer base is not as big as you might expect for a $900 million bank, which is great because I think the most difficult part of the market to obtain is the commercial segment," Holbrook said.
Roughly three-quarters of Centrix’s $677.4 million in loans, as of Dec. 31, are commercial loans to businesses in southern and central New Hampshire. Centrix has done some Small Business Administration lending, a strong suit for Eastern Bank, and has a niche lending division for aircraft.
For Eastern, the deal is "an opportunity to hopefully cross sell on investment management and insurance products, add additional banking services and also go after the retail market up there," Holbrook said. "They had a very attractive franchise that was limited in scope and one upon which we can build."
Holbrook said he expects the deal, which is pending regulatory approval, to close by the end of summer or early October, at the latest. Following the merger, Centrix President and CEO Joseph B. Reilly will remain with Eastern as its president for the bank’s New Hampshire division.
Holbrook said he anticipates Eastern will be able to keep most of Centrix’s 140 employees, comparing it to Eastern’s 2010 acquisition of Wainwright, in which it was able to keep on about 80 percent of employees.
RBC Capital Markets acted as financial advisor to Eastern Bank Corp., and Keefe, Bruyette & Woods, Inc. acted as financial advisor to Centrix Bank & Trust Company and rendered a fairness opinion to the board of directors of Centrix Bank & Trust in conjunction with this transaction. Goodwin Procter LLP served as legal counsel to Eastern Bank Corp. and Nutter McClennen & Fish LLP served as legal counsel to Centrix Bank & Trust.
