Maine-based Bangor Bancorp MHC and Damariscotta Bankshares Inc. agreed to merge in a transaction valued at about $35 million.
Under the terms of the deal, Damariscotta Bank & Trust Co. will merge into Bangor Savings Bank.
Damariscotta Bankshares shareholders will receive $27 in cash for each share of the company's common stock. The consideration represents about 185% of Damariscotta Bankshares' tangible book value per share as of Sept. 30, according to a news release.
On a per-share basis, S&P Global Market Intelligence calculates the deal value to be 187.5% of book and tangible book, and 27.9x earnings. The deal value is also 18.23% of assets and 20.44% of deposits, and the tangible book premium to core deposits ratio is 11.34%.
S&P Global Market Intelligence valuations for bank and thrift targets in the Northeast region between Dec. 17, 2018, and Dec. 17, 2019, averaged 149.51% of book and 157.75% of tangible book and had a median of 17.36x last-12-months earnings, on a per-share basis.
The merger is expected to close in the second quarter of 2020. The combined entity is expected to have $4.8 billion in assets, according to the news release.
Based on S&P Global Market Intelligence data, Bangor Bancorp will enter Lincoln County, Maine, with three branches to be ranked third with a 7.32% share of roughly $1.46 billion in total market deposits and will expand in Knox County, Maine, by two branches to be ranked fourth with a 6.38% share of about $1.71 billion in total market deposits. The company will also expand in Waldo County, Maine, by one branch to be ranked first with a 57.61% share of about $377.9 million in total market deposits.
Bangor Bancorp had total assets of $4.60 billion as of Sept. 30. Damariscotta Bankshares had $193.3 million in assets as of the same date, according to S&P Global Market Intelligence data.
Janney Montgomery Scott served as Bangor Savings Bank's financial adviser, while Hogan Lovells US LLP was its legal counsel. Sandler O'Neill & Partners LP served as financial adviser to Damariscotta Bankshares and provided a fairness opinion to the company's board. Verrill Dana LLP acted as Damariscotta Bankshares' legal counsel.