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Independent Bank (INDB), Meridian (EBSB) Get Merger Approval

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Independent Bank Corp. (INDB - Free Report) and Meridian Bancorp, Inc. have received the necessary shareholder approval for their proposed merger deal. In April 2021, Independent Bank and its subsidiary Rockland Trust Company agreed to acquire Meridian along with its subsidiary East Boston Savings Bank.

Completion of the deal, subject to regulatory approval and the satisfaction of other customary closing conditions, is expected in the fourth quarter of 2021.

Terms of the Deal & Financial Impact

At the time of the deal announcement, it was agreed that shareholders of Meridian will get 0.2750 shares of Independent Bank’s common stock for each of their own shares held.

The total deal value of $1.15 billion represents 150% of Meridian’s tangible book value.

Independent Bank projects the merger to be 7.9% accretive to its tangible book value per share immediately. Assuming fully phased-in cost saves, the deal is expected to be 23% accretive to earnings per share in 2022.

Combined pre-tax merger-related charges are anticipated to be $64 million in 2021.

Notably, the deal is intended to qualify as a tax-free reorganization for federal income tax purposes.

Management Comments

At the time of deal announcement, Christopher Oddleifson, the president and CEO of Independent Bank, stated, “This merger is consistent with our strategy of acquiring banks in overlapping and adjacent markets who share our relationship-focused style of banking. 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.”

The president and CEO of East Boston Savings Bank, Richard J. Gavegnano, said, “This transaction brings together two strong banks with a long and rich history serving and investing in our local communities. 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.”

Shares of Independent Bank have lost 2% so far this year, while Meridian has gained 30.2%.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Currently, both companies carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The finance sector has been witnessing an increase in mergers and acquisitions to dodge the heightened costs of regulatory compliance and increased investments in technology in a bid to be competitive.

Recently, New York Community Bancorp, Inc. (NYCB - Free Report) and Flagstar Bancorp, Inc. (FBC - Free Report) also received shareholder approval for their proposed all-stock merger deal.


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