Cambridge, Mass.-based Cambridge Financial Group Inc. agreed to acquire Melrose, Mass.-based Melrose Bancorp Inc., the holding company of Melrose Bank, according to a news release posted on Newswire.com.
S&P Global Market Intelligence calculates the deal value is $52.8 million.
The acquisition is expected to be completed in the second quarter of 2020. Under the terms of the deal, Melrose Bancorp shareholders will receive $25.00 in cash per share.
Melrose Bank will be merged into Cambridge Savings Bank, with the latter as the surviving entity. Melrose Bank's office in Melrose will become a Cambridge Savings Bank branch following the merger.
Cambridge Financial Group has assets of about $4.2 billion, according to the news release. Melrose Bancorp had consolidated assets of $341 million at the end of September.
S&P Global Market Intelligence calculates the deal is 129.8% of common equity, 129.8% of tangible common equity and 42.0x earnings, on an aggregate basis. The deal value is 15.48% of assets and 19.53% of deposits, and the tangible book premium to core deposits ratio is 7.10%.
S&P Global Market Intelligence valuations for bank and thrift targets in the Northeast region between Dec. 18, 2018, and Dec. 18, 2019, averaged 159.61% of book and 166.27% of tangible book and had a median of 18.65x last-12-months earnings, on an aggregate basis.
After the completion of the deal, Cambridge Financial Group will have roughly $4.7 billion in consolidated assets, according to the news release.
The deal will enable Cambridge Financial Group to expand in Middlesex County, Mass., by one branch, which will be ranked fourth with a 5.06% share of approximately $65.09 billion in total market deposits.
Keefe Bruyette & Woods served as financial adviser to Melrose Bancorp and rendered a fairness opinion to the company's board. Luse Gorman acted as Melrose Bancorp's legal counsel.