Independent Bank has agreed to merge with rival US-based bank holding company Enterprise Bancorp in a cash-and-stock deal worth about $562m.
Enterprise Bancorp is the parent company of Enterprise Bank and Trust, while Independent Bank owns Rockland Trust, a full-service commercial bank. Both the holding companies are listed on the NASDAQ Global Select Market and based in Massachusetts.
Under the terms of the definitive merger agreement, shareholders of Enterprise Bancorp will receive 0.6 shares of Independent common stock and $2 in cash for each Enterprise Bancorp common share.
Based on Independent Bank’s closing stock price of $71.77 on 6 December 2024, this equates to $45.06 per share.
The transaction is structured as a tax-free reorganisation for federal income tax purposes, ensuring that the stock portion of the merger consideration is tax-free for Enterprise Bancorp shareholders.
Through the proposed deal, Enterprise Bancorp will merge into Independent Bank and Enterprise Bank will integrate with Rockland Trust.
As part of the merger, Independent Bank is set to issue around 7.5 million shares of its common stock and pay $27.1m in cash.
Established in 1989, Enterprise Bank operates 27 full-service branches across Massachusetts and New Hampshire.
As of 30 September 2024, the bank reported total assets of $4.7bn, $3.8bn in net loans, $4.2bn in deposits, and $1.5bn in wealth assets under management.
Enterprise Bancorp CEO Steven Larochelle said: “From the very start, Enterprise Bank has been dedicated to helping our communities succeed. That vision has inspired our long-standing commitment to our customers’ success, product innovation and community service.”
“We are excited to join an organisation that lives these same values. Our customers will benefit from the additional products, services and technology Rockland Trust offers while continuing to experience the personal relationships they deserve.”
The merger is expected to enhance Independent Bank’s earnings per share by approximately 16% in 2026, the first full year of combined operations, following the implementation of cost savings.
Independent Bank CEO and president Jeffrey Tengel said: “Enterprise Bank is the perfect merger partner for Rockland Trust, consistent with all aspects of our outstanding long-term merger track record.
“Rockland Trust and Enterprise Bank share a deep commitment to strengthening our local communities by putting people and relationships first. Both institutions believe that banking is about making a meaningful, positive difference in the lives of local families and businesses.”
The boards of both companies have unanimously approved the merger. Enterprise Bancorp directors and executives, collectively owning 20.4% of the company’s outstanding shares, have agreed to vote in favour of the transaction.
No approval from Independent Bank shareholders is required.
Subject to regulatory approvals, Enterprise Bancorp shareholder approval, and customary conditions, the transaction is expected to be closed in the second half of 2025.
