Eastern Bankshares (EBC), Cambridge (CATC) Sign Merger Deal
Eastern Bankshares, Inc. EBC, the stock holding company for Eastern Bank, has entered into an all-stock merger deal with Cambridge Bancorp CATC. Per the deal, Cambridge will merge with and into Eastern. The completion of the deal, subject to receipt of regulatory approvals and approval by the shareholders of both companies, is expected in the first quarter of 2024.
Per the terms of the deal, which has been approved by the boards of both companies, Cambridge shareholders will receive 4.956 shares of Eastern common stock for each share of Cambridge common stock they own.
Based on Eastern’s closing price of $13.41 on Sep 18, 2023, the deal is valued at approximately $528 million and the total consideration represents 114% of Cambridge's tangible book value (non-GAAP) and a 24% increase to the 30-day volume weighted average price of Cambridge.
As the Cambridge Trust brand is distinct in its peer local markets, the merged private banking and wealth management divisions will work under the brand and leadership of Cambridge Trust. All other areas of the merged bank, including Commercial, Business and Consumer Banking will operate under the Eastern Bank brand name.
CATC’s total assets and assets under management and administration ("AUMA") were approximately $5.5 billion and $4.4 billion, respectively, as of Jun 30, 2023. Its total loans and total deposits summed up to $4 billion and $4.4 billion, respectively, as of the same date.
The merger is expected to result in a company with approximately $27.1 billion in total assets, $18 billion in total loans, $22.6 billion in deposits and $7.6 billion of AUMA.
Bob Rivers, CEO and chair of the board of Eastern Bankshares, stated, "As we set our sights on the future, the enhanced capabilities and financial strength created by this merger will allow us to further position Eastern as the region's local financial partner of choice, delivering enhanced value for our customers and shareholders, greater support for our communities, and increased opportunities for our colleagues."
Over the past three months, shares of EBC and CATC have gained 5.2% and 5.5%, respectively, compared with the industry’s upside of 1.8%.
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Currently, the companies carry a Zacks Rank #3 (Hold) each. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Inorganic Expansion Efforts by Other Firms
BlackRock TCP Capital Corp. TCPC entered into an agreement with BlackRock Capital Investment Corporation BKCC, wherein BKCC will merge with and into a wholly-owned indirect subsidiary of TCPC. The completion of the deal, subject to the approval of TCPC and BKCC shareholders, HSR Act approval and satisfaction of other customary closing conditions, is expected in the first quarter of 2024.
Following the merger, BlackRock TCP Capital will continue to trade under the ticker TCPC and the surviving entity will continue as a subsidiary of TCPC.
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