Portland, Maine-based Banknorth Group Inc. announced yesterday that it has entered into a definitive agreement with BostonFed Bancorp Inc., the parent company of Boston Federal Savings Bank, to acquire BostonFed in a transaction valued at approximately $195 million.
BostonFed, with $1.7 billion in assets and $1.2 billion in deposits, has 16 branches in Middlesex, Norfolk, Essex and Suffolk counties, in Massachusetts. Of the total 16 branches, BostonFed has 10 branches and approximately $650 million in deposits in Middlesex County, which when combined with Banknorth’s existing franchise, will give Banknorth 34 branches and $1.7 billion in deposits in one of the nation’s wealthiest counties.
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“This transaction is an excellent opportunity to expand Banknorth’s strong and growing franchise in the attractive communities surrounding Boston,” said William J. Ryan, Banknorth chairman, president and CEO. “We have seen tremendous growth in our Massachusetts franchise, and this transaction continues that trend.”
Banknorth Group Inc.’s banking subsidiary, Banknorth, N.A., currently operates 145 branches in Massachusetts and in the last six months has completed the acquisitions of CCBT Financial Companies Inc., Foxborough Savings Bank and First & Ocean Bancorp, Inc., all of which were located in Massachusetts. After completion of this transaction, Banknorth will have 161 branches in Massachusetts.
“We believe this transaction will be slightly accretive to earnings per share for Banknorth, and is consistent with our history of reasonably priced transactions,” stated Peter J. Verrill, Banknorth’s chief operating officer.
The definitive agreement has been approved by the directors of both Banknorth and BostonFed. The transaction is subject to all required regulatory approvals, approval of the shareholders of BostonFed and other customary conditions. The transaction is expected to be completed in early 2005 with operational integration to follow soon thereafter.
Banknorth Group has $29 billion in assets. Banknorth’s banking subsidiary, Banknorth, N.A., operates banking divisions in Connecticut (Banknorth Connecticut); Maine (Peoples Heritage Bank); Massachusetts (Banknorth Massachusetts); New Hampshire (Bank of New Hampshire); New York (Evergreen Bank); and Vermont (Banknorth Vermont).
Banknorth and BostonFed will be filing relevant documents concerning the merger with the Securities and Exchange Commission.
