Cambridge Bancorp, the holding company for Cambridge Trust, and Wellesley Bancorp, the holding company for Wellesley Bank, signed a definitive agreement pursuant to which Wellesley will merge with and into Cambridge in an all-stock transaction.
Under the terms of the agreement, each share of Wellesley common stock will be exchanged for 0.580 shares of Cambridge common stock. The transaction is presently valued at $45.54 per Wellesley common share, or approximately $122 million in the aggregate, based upon Cambridge Bancorp’s 10-day average closing price of $78.53 as of December 4, 2019. On a pro forma basis the transaction is expected to be approximately 4.4% accretive to Cambridge’s 2021 earnings per share and approximately 1.6% dilutive to tangible book value per share with an expected earnback period of approximately 2.2 years.
The merger is expected to enhance and expand Cambridge’s greater Boston presence with the addition of Wellesley’s six full-service banking offices in Norfolk, Middlesex, and Suffolk Counties. Cambridge and Wellesley share similar service-oriented business models, and each provide their clients with banking and wealth management services. Thomas Fontaine, chairman, president and CEO of Wellesley, will join the combined company in the role of chief banking officer and director.
As of September 30, 2019, Wellesley had approximately $986 million in total assets, $833 million in gross loans, $759 million in deposits, and $363 million in wealth management assets. Based on financial metrics as of September 30, 2019, the combined company is expected to have over $3.8 billion in assets, $3.0 billion in gross loans, $3.2 billion in deposits and $3.6 billion of wealth management assets upon completion of the transaction.
Denis Sheahan, CEO of Cambridge Trust, commented, “We are pleased to announce the strategic combination of Cambridge Trust and Wellesley Bank, who are both dedicated to providing individuals, families, and businesses with exceptional personal attention and custom financial solutions.” Sheahan added, “Wellesley Bank is a well-managed, financially strong and growing company located in attractive markets. The combination strengthens the position of Cambridge Trust in Greater Boston and is a logical extension of our market. We look forward to welcoming the talented Wellesley Bank team to Cambridge Trust.”
“We are excited about the opportunity to partner with Cambridge Trust,” said Fontaine. “Cambridge Trust, much like Wellesley Bank, has a genuine commitment to its clients and the community. Together, we’ll build a premier private banking and wealth management company in Greater Boston and Southern New Hampshire.”
The transaction has been approved by the boards of directors of both companies and is expected to be completed during the second quarter of 2020, subject to regulatory and shareholder approval and other customary closing conditions. Upon closing, three Wellesley directors will join the board of directors of Cambridge, including Fontaine.
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