Independent Bank, the parent of Rockland Trust, and Enterprise Bancorp, the parent of Enterprise Bank and Trust, signed a definitive merger agreement pursuant to which Enterprise will merge into Independent and Enterprise Bank will merge into Rockland Trust in a cash and stock transaction for total consideration valued at approximately $562 million in aggregate, or $45.06 per share based on the Independent closing price of $71.77 on Dec. 6, 2024.
The merger agreement provides that Enterprise shareholders will receive 0.60 shares of Independent common stock and $2.00 in cash for each share of Enterprise common stock they hold. The transaction is intended to qualify as a tax-free reorganization for federal income tax purposes and to provide a tax-free exchange for Enterprise shareholders for the Independent common stock portion of the merger consideration they will receive.
Independent anticipates issuing approximately 7.5 million shares of its common stock and paying an aggregate amount of $27.1 million in cash in the merger. The merger is expected to close in H2/25 subject to customary closing conditions, including regulatory approvals and approval of Enterprise shareholders. No vote of Independent shareholders is required.
“Enterprise Bank is the perfect merger partner for Rockland Trust, consistent with all aspects of our outstanding long-term merger track record. Rockland Trust and Enterprise Bank share a deep commitment to strengthening our local communities by putting people and relationships first. Both institutions believe that banking is about making a meaningful, positive difference in the lives of local families and businesses,” Jeffrey Tengel, president and CEO of Independent Bank, said. “We look forward to extending Rockland Trust’s footprint in northern Massachusetts, as well as entering the New Hampshire market. Together, our combined institution will bring expanded convenience and additional products and services to the communities we are proud to serve.”
“From the very start, Enterprise Bank has been dedicated to helping our communities succeed. That vision has inspired our long-standing commitment to our customers’ success, product innovation and community service,” Steven Larochelle, CEO of Enterprise Bancorp, said. “We are excited to join an organization that lives these same values. Our customers will benefit from the additional products, services and technology Rockland Trust offers while continuing to experience the personal relationships they deserve.”
Enterprise Bank was founded in 1989 in Lowell, MA and conducts its business from 27 full-service branches in Massachusetts and New Hampshire. Rockland Trust does not plan to close any Enterprise Bank branches and intends to maintain a significant presence in Lowell. As of September 30, 2024, Enterprise Bank had $4.7 billion in total assets, $3.8 billion in net loans, $4.2 billion in deposits and $1.5 billion in wealth assets under management and administration.
“Following this merger, Rockland Trust will have approximately $25 billion in assets and $8.7 billion in wealth assets under administration,” Tengel said. “In addition to expanding our branch footprint north and into New Hampshire, this acquisition will further enhance our core deposit franchise and provide opportunities for us to introduce our full suite of banking solutions, wealth management services and comprehensive financial advice to new businesses and households.”
The merger is expected to be approximately 16% accretive to Independent’s earnings per share in 2026, the first full year of combined operations, assuming full phase-in of cost savings. Independent anticipates the transaction will meet its three year or less tangible book value earn back hurdle rate. Combined merger-related charges are expected to be approximately $61.2 million before tax, in the aggregate. As part of the transaction, Independent plans to raise approximately $250 million in subordinated debt prior to the transaction closing. Post close, board chair and Enterprise Bank founding member, George Duncan, will become an advisor to the Independent Board and Larochelle will serve as a consultant for Rockland Trust for one year. Additionally, Independent will appoint two Enterprise directors to its board following the merger.
The boards of directors of each company have unanimously approved the transaction. Enterprise’s directors and executive officers who currently own, in the aggregate, about 20.4% of Enterprise’s outstanding shares have signed voting agreements pursuant to which they have agreed to vote their shares in favor of the merger.
Independent was advised by Keefe, Bruyette & Woods, a Stifel company, and used Simpson Thacher & Bartlett as its legal counsel. Enterprise was advised by Piper Sandler and used Hunton Andrews Kurth as its legal counsel.
