Massachusetts financial institutions to merge in a $562 million joint venture
Independent Bank Corp., a Massachusetts-based financial institution, has announced a strategic acquisition of Enterprise Bancorp in a deal worth $562 million. This marks Independent's first acquisition since 2021, when it acquired East Boston Savings Bank.
The merger, expected to close in the second half of 2025, will see Enterprise Bank customers gain access to 123 branch locations in eastern Massachusetts, along with additional technology and product offerings. This move will help Independent Bank Corp. enter New Hampshire and expand its footprint into northern Massachusetts, resulting in a total of 151 locations.
As part of the deal, Enterprise shareholders will receive 0.60 shares of Independent common stock and $2 in cash for each share of Enterprise common stock they hold. All branch staff will be retained, and retaining other personnel is a priority during the merger process. Enterprise Bank will be folded into Independent's subsidiary, Rockland Trust.
Two Enterprise directors will join Independent's board, and George Duncan, a key figure at Enterprise, will become an adviser to Independent's board, while Steven Larochelle will serve as a consultant for Rockland Trust for one year.
The strategic rationale behind the acquisition centers on expanding operations, creating new opportunities through integration, and strengthening the bank's financial position. The merger is projected to increase earnings per share by 16% in 2026.
Expected outcomes of the merger include operational synergies and new business opportunities, a strengthened balance sheet, growth ambitions, enhancements in net income and capital deployment capacity, and a planned core operating system conversion to unify banking platforms.
However, management acknowledges operational and cost risks during integration. The banks anticipate incurring roughly $61.2 million in pre-tax merger-related charges. Independent intends to raise $250 million in subordinated debt before closing.
The combined entity will have $25 billion in assets, $20 billion in deposits, $19 billion in loans, and $8.7 billion in wealth assets under administration, with a $3.6 billion market cap.
Christopher O'Connell, analyst at Keefe, Bruyette & Woods, believes the merger makes strategic sense for Independent Bank Corp. The boards of both companies have unanimously approved the transaction.
Enterprise will pay around $22.49 million in termination fees under specific circumstances, as stated in a Securities and Exchange Commission filing. The merger does not plan to close any branches from either Enterprise Bank or Rockland Trust.
The strategic acquisition of Enterprise Bancorp by Independent Bank Corp. is not only an expansion of their business into New Hampshire and northern Massachusetts but also anticipates strengthening their industry position with projected growth in earnings per share by 16% in 2026. This move is expected to bring operational synergies, new business opportunities, and enhance net income for both banks, while potential cost risks during integration are acknowledged.
