New England Bancorp and Rockland Trust to acquire Bank of Cape Cod
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.
Bank of Cape Cod was founded in 2006 and currently has four Barnstable County bank branches, approximately $214 million in deposits, and approximately $229 million in loans.
Independent anticipates issuing approximately 660,000 shares of its common stock in the merger and will cash out any New England Bancorp warrants or options that remain outstanding at the effective time of the merger.
Based upon Independent's $45.65 per share closing price on March 16, 2016 the transaction is valued at approximately $30.7 million.
The transaction is intended to qualify as a tax-free reorganization for federal income tax purposes and to provide a tax-free exchange for New England Bancorp shareholders.
Independent anticipates that the acquisition will be approximately $0.05 accretive to 2017 operating earnings, primarily driven by consolidation efficiencies.
Independent estimates that the transaction will generate an internal rate of return of about 20% and expects the transaction will be neutral to tangible book value per share.
One time expenses attributable to the merger are expected to be approximately $3 million after tax in 2016.
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 New England Bancorp shareholders, and other standard conditions.
Independent shareholders do not need to approve the merger. The parties anticipate that the closing of the transaction will occur in the fourth quarter of 2016.
New England Bancorp’s directors and certain executive officers, who currently own about 17.8% of New England Bancorp’s outstanding shares in the aggregate, have signed voting agreements pursuant to which they have agreed to vote their shares in favor of the merger. ■