January 20, 2011
JANUARY 20, 2011
People’s United Financial, Inc. To Acquire Danvers Bancorp
New England’s Largest Independent Bank Further Expands Presence in Greater Boston Market
BRIDGEPORT, CT and DANVERS, MA – People’s United Financial, Inc. (Nasdaq: PBCT), the holding company for People’s United Bank, and Danvers Bancorp, Inc. (Nasdaq: DNBK), of Danvers, Massachusetts, the holding company for Danversbank, announced today a definitive agreement pursuant to which People’s United Financial will acquire Danvers Bancorp, in a 55% stock and 45% cash transaction valued at approximately $493 million. Completion of the transaction is subject to customary closing conditions, including the receipt of regulatory approval and the approval of Danvers Bancorp’s shareholders.
“We are pleased that Danversbank has chosen to grow with People’s United Bank,” said Jack Barnes, President and Chief Executive Officer of People’s United Financial. “Danversbank, combined with our existing Massachusetts presence, makes People’s United – New England’s largest independent bank – the seventh largest bank both in Massachusetts and in the Boston MSA. Danversbank is a high-quality commercial institution that offers an excellent platform for growth and is a natural extension of our brand. It complements our continuous footprint from Worcester, in central Massachusetts, through Boston and on into New Hampshire.”
“I’m confident that this transaction will benefit Danvers Bancorp shareholders, customers and employees,” said Kevin T. Bottomley, Chairman, President and Chief Executive Officer of Danvers Bancorp. “People’s United brings substantial resources for increased lending, additional products and services and opportunities for professional development for our employees. When coupled with our highly experienced lending staff and extensive eastern Massachusetts branch network, the combined organization will be well positioned to compete with the biggest players in the Greater Boston area.”
Bottomley will join the People’s United Board of Directors upon the closing of the transaction. In addition, he will be a strategic advisor to People’s United in its efforts to successfully integrate the Danversbank organization and grow People’s United in the Greater Boston market.
People’s United expects the transaction to be immediately accretive to operating earnings with an IRR greater than 15%. The transaction is expected to close late in the second quarter of 2011.
Under the terms of the definitive agreement, which has been approved by both companies’ boards of directors, Danvers Bancorp shareholders may elect to receive either $23.00 in cash, or 1.624 shares of People’s United Financial stock for each Danvers Bancorp share, subject to customary pro ration provisions, whereby 55% of Danvers Bancorp shares will be exchanged for stock and 45% for cash. The transaction is valued at $23.00 per Danvers Bancorp share, based on the average closing price of People’s United for the 10-day period ended January 19, 2011. The receipt of People’s United Financial stock by shareholders of Danvers Bancorp is expected to be tax-free.
To ensure the continuity of Danversbank’s philanthropic and community-based mission and for the benefit of the communities traditionally served by Danversbank, the parties have agreed that The Danversbank Charitable Foundation Inc. will continue its separate existence for a period following the consummation of the transaction. People’s United has also agreed to make certain charitable contributions in Danvers’ market area in the near-term. Mr. Bottomley will serve as Chairman of the board of directors of the Foundation and, in recognition of the combined franchise, the board will be expanded with the addition of two directors to be proposed by People’s United.
People’s United was advised in this transaction by Keefe, Bruyette & Woods as financial advisor and Simpson Thacher & Bartlett LLP as legal counsel. Danvers Bancorp was advised by Endicott Financial Advisors, LLC, as financial advisor, and received a fairness opinion from Sandler O’Neill & Partners, L.P., while Hogan Lovells US LLP acted as legal counsel.
Additional information regarding this transaction will be included in the People’s United fourth quarter 2010 earnings conference call and presentation taking place on January 21, 2011 at 11 a.m., Eastern Time. The call may be heard through www.peoples.com by selecting "Investor Relations" in the "About People's United" section on the home page, and then selecting "Conference Calls" in the "News and Events" section. Additional materials relating to the call may also be accessed at People's United Bank's web site. The call will be archived on the web site and available for approximately 90 days.
About People’s United Financial, Inc.
People’s United Bank is a subsidiary of People's United Financial, Inc., a diversified financial services company with $25 billion in assets. Peoples United Bank, founded in 1842, provides consumer, commercial and wealth management services through nearly 340 branches in Connecticut, Vermont, New York, New Hampshire, Maine and Massachusetts. Through additional subsidiaries, People's United provides equipment financing, asset management, brokerage and financial advisory services, and insurance services.
About Danvers Bancorp