Bar Harbor, Maine-based Bar Harbor Bankshares ($1.62 billion) has agreed toacquire Newport, N.H.-based LakeSunapee Bank Group ($1.56 billion) in an all-stock deal valued atabout $143 million, or roughly $17 per share.
The deal is slated to close in the fourth quarter of 2016 orthe first quarter of 2017, subject to approvals from shareholders andregulators. The 35 current LakeSunapee Bank FSB branches will continue to operate under the LakeSunapee brand after deal completion. Bar Harbor Bankshares is the holdingcompany of Bar Harbor Bank &Trust.
At closing, the combined institution is expected to haveapproximately $3.3 billion in assets, $2.4 billion in net loans, $2.2 billionin deposits and more than $2.0 billion in assets under management, with 50branches across three states.
Under the deal, each outstanding share of Lake Sunapeecommon stock will be exchanged for 0.4970 share of Bar Harbor common stock.Following deal closing, Bar Harbor shareholders will own about 59% of thecombined company's stock, while Lake Sunapee shareholders will ownapproximately 41%. The deal is expected to be accretive to earnings per sharefor both parties in 2017, excluding the impact of potential revenue enhancementopportunities and one-time transaction costs.For Bar Harbor Bankshares, the deal should be immediately accretive to EPS:11.4% in first year (2017) and 17.3% in 2018, according to an investorpresentation about the deal. The per-share tangible book value earn-back periodis expected to be 4.0 years.
Following completion, Lake Sunapee COO William McIver willstay on with the combined company as executive vice president and regionalpresident for the New Hampshire and Vermont markets.
In terms of the boardroom, four Lake Sunapee directors,including Vice Chairman, President and CEO Stephen Theroux, will be appointedto the Bar Harbor board, bringing the total number of directors to 15 atclosing.
Bar Harbor had Sandler O'Neill & Partners LP asfinancial adviser on the deal, while K&L Gates LLP acted as outsidecounsel. Griffin Financial Group LLC served as financial adviser to Lake Sunapeewith Richard Quad as lead banker. Hogan Lovells US LLP served as outsidecounsel to Lake Sunapee.