| Independent Bank Corp. will acquire New England Bancorp, the parent of Bank of Cape Cod, in a $30.7 million transaction anticipated to close in the fourth quarter.
“We welcome the opportunity to join Bank of Cape Cod with Rockland Trust,” Christopher Oddleifson, Independent’s president and CEO, said in a statement. “Our banks both focus on making commercial loans without compromising credit quality. We expect that this acquisition will be accretive to 2017 earnings, increase Rockland Trust’s Cape Cod market share, and benefit our shareholders.”
Under the merger agreement each share of outstanding New England Bancorp common stock will be exchanged for 0.25 of a share of Independent common stock.
“Joining forces with Rockland Trust provides us with the scale and resources to compete more effectively with the largest banks in our community while allowing us to continue to do what we do best, customer and community-focused local banking. It will offer our customers a host of products, capabilities and resources we don’t have today,” New England Bancorp CEO Tim Telman wrote in a message to his employees, which was filed with the SEC.
Bank of Cape Cod was founded in 2006 and has four Barnstable County bank branches, which the Rockland Trust parent intends to close as part of the deal, along with about $214 million in deposits, and approximately $229 million in loans.
The bank employs approximately 35 people.
All four Bank of Cape Cod branches are near to established Rockland Trust locations, the bank said via email this morning. The bank said that it is trying to find employment for Bank of Cape Cod employees elsewhere within the company.
Independent said in the statement that it anticipates issuing approximately 660,000 shares of its common stock in the merger and that it will cash out any outstanding New England Bancorp warrants or options when the merger closes. Based upon Independent’s $45.65 per share closing price on March 16, the transaction is valued at approximately $30.7 million.
The Rockland Trust parent also said it anticipates the deal will be about 5 cents accretive to its 2017 operating earnings, will generate an internal rate of return around 20 percent and will be neutral to tangible book value per share. The company said it expects one-time expenses associated with the merger to total about $3 million after tax this year.
The boards of directors of both companies unanimously approved the deal, which is awaiting regulatory approval. New England Bancorp’s directors and certain executive officers, who currently own about 17.8 percent of the company’s outstanding shares, have signed agreements to vote their shares in favor of the merger.
Independent used Day Pitney LLP as its legal counsel and received a fairness opinion from Keefe, Bruyette & Woods. New England Bancorp was advised by Piper Jaffray & Co. and used Luse Gorman PC as its legal counsel.
Independent Bank Corp. also announced last week that it would pay a dividend of 29 cents per share on April 8 to stockholders of record on March 28.
