BOSTON — Eastern Bank has agreed to purchase Century Bank in an all-cash merger with an aggregate transaction value of $642 million.
The announcement was made jointly by both companies Wednesday night. The purchase value is $110 million higher (21 percent) than Wednesday’s market close.
The merger will create a $22 billion combined franchise and solidify Eastern’s leading position in Boston and Eastern Massachusetts, according to the announcement.Eastern will also increase quarterly dividends to stockholders by 33 percent to $.08 per share.
The transaction comes less than six months after Eastern’s initial public offering that raised approximately $1.7 billion in equity capital, and leaves the bank with approximately $1.1 billion for other acquisitions and growth.
The agreement has been unanimously approved by both boards of directors. Under its terms, Century shareholders will receive $115.28 in cash for each share of Century Bancorp, Inc.’s common stock.
The acquisition is expected to close in the fourth quarter of 2021, subject to certain conditions, including the receipt of required regulatory approvals, shareholder approval, and other standard conditions. Eastern expects full integration of bank branches and systems by the end of the first quarter of 2022.
Upon closing, Eastern will absorb Century and continue as the surviving entity. Concurrently, it will merge Century Bank into Eastern Bank and convert Century customers to the Eastern platform with Century Bank branches assuming the Eastern Bank name.
“We’ve admired Century’s success since its founding by Marshall Sloane in 1969 and today they are New England’s largest family-run bank,” said Eastern CEO and Board Chairman Bob Rivers. “Under the leadership of Barry R. Sloane and Linda Sloane Kay, the Century Bank brand has continued to rise in prominence and it was a proud moment for us when they communicated they wanted to partner with Eastern.
“We are excited for the opportunities this agreement creates and believe our combination will deepen our reach in providing banking services and other support to communities across Greater Boston and southern New Hampshire,” Rivers said.
“Our complementary business models and shared values make this partnership a natural fit,” said Sloane, who is chairman, president and CEO of Century Bank. “Both organizations are highly respected as leaders in the community, and we believe Eastern’s focus on innovation and technology will help to further ensure Century customers have greater access to banking products and services that meet their needs where and when they need them.”
Eastern has 89 branches in eastern Massachusetts while Century has 27, the majority of which are in the Greater Boston area. Ninety-six percent of the Century branches are within three miles of an Eastern branch. Within the next year, pending permission from the Commonwealth of Massachusetts, the merged corporation expects to have 98 branches, with either 18 Eastern or Century branches likely closing. Lynn’s operations center at the end of Market Street will continue to have the largest concentration of Eastern employees.
A team of 85 people worked on this confidential transition, code-named “Clarion,” over the winter. It is the seventh and largest acquisition done by Eastern in 21 years.
