Independent Bank Corp. (INDB), the parent company of Rockland Trust Company, and Enterprise Bancorp, Inc. (EBTC), the parent company of Enterprise Bank and Trust Company, announced on Monday that they have entered into a definitive merger agreement. This agreement outlines that Enterprise will merge with Independent, and Enterprise Bank will combine with Rockland Trust. The transaction, which involves both cash and stock, is valued at approximately $562 million in total, equating to $45.06 per share, based on Independent's closing price of $71.77 as of December 6, 2024.
According to the terms of the merger, shareholders of Enterprise will receive 0.60 shares of Independent common stock, along with $2.00 in cash, for each Enterprise common share they own. Independent plans to issue roughly 7.5 million shares of its common stock and pay a total of $27.1 million in cash as part of the merger agreement.
This merger aims to bring together two entities centered on building relationships, extending Rockland Trust's reach into northern Massachusetts and southern New Hampshire.
Expected to conclude in the latter half of 2025, the merger remains subject to standard closing conditions, including obtaining regulatory approvals and the approval of Enterprise's shareholders. Approval from Independent's shareholders is not necessary.
Rockland Trust does not intend to shutter any Enterprise Bank branches and plans to maintain a strong presence in Lowell.
The merger is projected to enhance Independent's earnings per share by approximately 16% in 2026, which will be the first full year of the combined operations, contingent on the realization of cost savings. The anticipated pre-tax merger-related charges are estimated to be around $61.2 million in total.
In preparation for the closing of the transaction, Independent is planning to raise roughly $250 million through subordinated debt.
Post-merger, George Duncan, the Board Chairman and a founding member of Enterprise Bank, will become an advisor to the Independent Board. Larochelle will serve as a consultant to Rockland Trust for a year. Independent will also add two Enterprise directors to its board following the merger.
Both companies' boards of directors have given their unanimous approval of the transaction. Moreover, Enterprise's directors and executive officers, who collectively own about 20.4% of Enterprise's outstanding shares, have entered into voting agreements to support the merger by voting their shares in its favor.
