CAMBRIDGE, Mass., Sept. 19,
2023 /PRNewswire/ -- Cambridge Bancorp (NASDAQ: CATC)
("Cambridge"), the parent company
of Cambridge Trust Company ("Cambridge Trust"), and Eastern
Bankshares, Inc. ("Eastern") (NASDAQ Global Select Market: EBC),
the stock holding company for Eastern Bank, announced they have
entered into a definitive merger agreement pursuant to which
Cambridge will merge with and into
Eastern in an all-stock transaction valued at approximately
$528 million ("the merger").
Key Highlights:
- Each share of Cambridge
common stock will be exchanged for 4.956 shares of Eastern common
stock, a 24% premium to Cambridge's thirty-day volume weighted average
price
- Merger will create a $27
billion combined franchise and further solidify Eastern as
the largest community bank in Massachusetts and New Hampshire by
deposits 1
- Merger will create the largest bank-owned Independent
Investment Advisor in Massachusetts and the tenth largest overall in
Massachusetts
2
- Eastern plans to welcome Denis
Sheahan, President and CEO of Cambridge, to its executive team as
CEO
1 Source:
S&P Global Market Intelligence; FDIC Summary of Deposit Survey
(2022). Excludes trust banks.
2 Source: Boston Business Journal
|
Cambridge and Eastern
Merger
Under the terms of the merger agreement, which has been
unanimously approved by both boards of directors, each share of
Cambridge common stock will be
exchanged for 4.956 shares of Eastern common stock. Eastern
anticipates issuing approximately 39.4 million shares of its common
stock in the merger. Based upon Eastern's $13.41 per share closing price on September 18, 2023, the transaction is valued at
approximately $528 million and the
aggregate consideration represents 114% of Cambridge's tangible book value* and a 24%
premium to Cambridge's thirty-day
volume weighted average price.
Upon closing, Denis Sheahan,
Chairman, President and CEO of Cambridge, will become the CEO of Eastern and
will join Eastern's Board of Directors. Eastern's President
Quincy Miller will be promoted to
Vice Chair, President, and Chief Operating Officer. Both Mr.
Sheahan and Mr. Miller will report directly to Bob Rivers, who will serve as Executive Chair
and Chair of the Board of Directors. In addition to Mr.
Sheahan, three Cambridge directors
are expected to be elected to Eastern's Board of Directors in
connection with the closing.
Given the distinction of the Cambridge Trust brand in the banks'
shared local markets, the combined wealth management and private
banking divisions will operate under the Cambridge Trust brand and
leadership.
As of June 30, 2023, Cambridge had approximately $5.5 billion of total assets, $4.0 billion of total loans, $4.4 billion of total deposits and $4.4 billion of client assets under management
and administration ("AUMA"). Upon completion of the merger,
the combined company is expected to have approximately $27.1 billion in total assets, $18.0 billion of total loans, $22.6 billion of deposits and $7.6 billion of AUMA.
"I've long admired the success of Cambridge Trust under Denis's
leadership, and I'm excited to welcome Denis and the Cambridge team to Eastern," said Bob Rivers, Chief Executive Officer and Chair of
the Board of Eastern Bankshares, Inc. and Eastern Bank. "As
we set our sights on the future, the enhanced capabilities and
financial strength created by this merger will allow us to further
position Eastern as the region's local financial partner of choice,
delivering enhanced value for our customers and shareholders,
greater support for our communities, and increased opportunities
for our colleagues."
Sheahan commented, "I am delighted to be a part of bringing
together two terrific companies who share common values and
vision. I know the Cambridge Trust team will rise to the
opportunity ahead and I look forward to working with our colleagues
at Eastern as we integrate and deliver exceptional service to our
clients."
The merger is expected to be completed during the first quarter
of 2024, subject to certain conditions, including the receipt of
required regulatory approvals; and approval by Cambridge and Eastern shareholders. All
Cambridge directors and executive officers and their affiliates
with voting power have agreed to vote in favor of the
merger.
Advisors
BofA Securities, Inc. served as financial advisor and Hogan
Lovells US LLP provided legal counsel to Cambridge. J.P. Morgan Securities LLC served
as financial advisor and Nutter McClennen & Fish LLP provided
legal counsel to Eastern.
About Cambridge Bancorp
Cambridge Bancorp, the parent company of Cambridge Trust
Company, is based in Cambridge,
Massachusetts. Cambridge Trust Company is a 133-year-old
Massachusetts chartered commercial
bank with approximately $5.5 billion
in assets at June 30, 2023, and a total of 22 Massachusetts
and New Hampshire locations.
Cambridge Trust Company is one of New England's leaders in private
banking and wealth management with $4.4
billion in client assets under management and administration
at June 30, 2023. The Wealth Management group maintains
offices in Boston and Wellesley, Massachusetts and Concord, Manchester, and Portsmouth, New Hampshire.
About Eastern Bankshares, Inc. and Eastern Bank
Eastern Bankshares, Inc. is the stock holding company for
Eastern Bank. Founded in 1818, Boston-based Eastern Bank has more than 120
locations serving communities in eastern Massachusetts, southern and coastal
New Hampshire, and Rhode Island. As of June 30, 2023, Eastern Bank had approximately
$22 billion in total assets. Eastern
provides banking, investment and insurance products and services
for consumers and businesses of all sizes, including through its
Eastern Wealth Management division and its Eastern Insurance Group
LLC subsidiary. Eastern takes pride in its outspoken advocacy and
community support that includes $240
million in charitable giving since 1994. An inclusive
company, Eastern employs approximately 2,100 deeply committed
professionals who value relationships with their customers,
colleagues, and communities. For investor information, visit
investor.easternbank.com.
Non-GAAP Financial Measures
*Denotes a non-GAAP financial measure used in this press
release.
This press release contains both financial measures based on
accounting principles generally accepted in the United States ("GAAP") and non-GAAP based
financial measures. Management believes that providing certain
non-GAAP financial measures provides investors with information
useful to their understanding financial performance, performance
trends and financial position. Management utilizes these measures
for internal planning and forecasting purposes, and management, as
well as securities analysts, investors, and other interested
parties, also use these measures to compare peer company operating
performance. These non-GAAP measures should not be considered a
substitute for GAAP basis measures and results. Because non-GAAP
financial measures are not standardized, it may not be possible to
compare these financial measures with other companies' non-GAAP
financial measures having the same or similar names. A
reconciliation of tangible book value for Cambridge is included in a table at the end of
the press release.
This press release also includes certain forward-looking modeled
projections and estimates, including estimates of the combined
proforma company's tangible book value per share. These
metrics are dependent on variable factors, including management's
assumptions and modeling inputs as well as market driven factors
such as interest rates, over which Cambridge cannot exercise control.
Accordingly, reconciliations of Cambridge's outlook on these items cannot be
readily determined in a format useful for investors and could not
be made readily available.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of section 27A of the Securities Act of 1933, as
amended, and section 21E of the Securities Exchange Act of 1934, as
amended. Forward-looking statements include statements regarding
anticipated future events and can be identified by the fact that
they do not relate strictly to historical or current facts. You can
identify these statements from the use of the words "may," "will,"
"should," "could," "would," "plan," "potential," "estimate,"
"project," "believe," "intend," "anticipate," "expect," "target"
and similar expressions. Forward-looking statements, by their
nature, are subject to risks and uncertainties. There are many
factors that could cause actual results to differ materially from
expected results described in the forward-looking statements.
Factors relating to the proposed transaction that could cause or
contribute to actual results differing materially from expected
results include, but are not limited to, the possibility that
revenue or expense synergies or the other expected benefits of the
transaction may not materialize in the timeframe expected or at
all, or may be more costly to achieve; that the transaction may not
be timely completed, if at all; that prior to the completion of the
transaction or thereafter, Cambridge or Eastern may not perform as
expected due to transaction-related uncertainty or other factors;
that required regulatory, shareholder or other approvals are not
obtained or other closing conditions are not satisfied in a timely
manner or at all; that the timing of completion of the proposed
transaction is dependent on various factors that cannot be
predicted with precision at this point; reputational risks and the
reaction of the companies' customers to the transaction; continued
pressures and uncertainties within the banking industry and
Cambridge and Eastern's markets,
including changes in interest rates and deposit amounts and
composition, adverse developments in the level and direction of
loan delinquencies, charge-offs, and estimates of the adequacy of
the allowance for loan losses, increased competitive pressures,
asset and credit quality deterioration, and legislative,
regulatory, and fiscal policy changes and related compliance costs;
and diversion of management time on transaction-related issues
These forward-looking statements are also subject to the risks
and uncertainties applicable to our respective businesses generally
that are disclosed in Cambridge's
and Eastern's 2022 Annual Reports on Form 10-K. Cambridge's and Eastern's SEC filings are
accessible on the SEC's website at www.sec.gov and on their
respective corporate websites at ir.cambridgetrust.com and
investor.easternbank.com. These web addresses are included as
inactive textual references only. Information on these websites is
not part of this document. For any forward-looking statements made
in this press release, Cambridge
and Eastern claim the protection of the safe harbor for
forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995. Except as required by law, each
company specifically disclaims any obligation to update any
forward-looking statements as a result of developments occurring
after the date of this press release.
Additional Information and Where to Find It
In connection with the proposed merger transaction, Eastern
intends to file with the SEC a Registration Statement on Form S-4
that will include a Joint Proxy Statement of Cambridge and Eastern and a Prospectus of
Eastern (the "joint proxy statement/prospectus"), as well as other
relevant documents concerning the proposed transaction. This
communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval, nor shall there be any sale of securities in
any jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. INVESTORS AND
SHAREHOLDERS OF CAMBRIDGE AND
EASTERN ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT
PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION WHEN IT
BECOMES AVAILABLE AND EACH OTHER RELEVANT DOCUMENT FILED WITH THE
SEC, AS WELL AS ANY AMENDMENT OR SUPPLEMENT TO THOSE DOCUMENTS,
BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. A copy of the
definitive joint proxy statement/prospectus, as well as other
filings containing information about Cambridge and Eastern, can be obtained without
charge, at the SEC's website (http://www.sec.gov). Copies of the
joint proxy statement/prospectus and the filings with the SEC that
will be incorporated by reference in the joint proxy
statement/prospectus can also be obtained, without charge, by
directing a request to Cambridge Investor Relations via email at
InvestorRelations@cambridgetrust.com or by telephone at (617)
520-5520 or to Eastern's Investor Relations team via email at
InvestorRelations@easternbank.com or by telephone at (781)
598-7920.
Participants in the Solicitation
Cambridge, Eastern, and their
respective directors, executive officers and other members of
management and employees may be deemed to be participants in the
solicitation of proxies from the shareholders of Cambridge and/or Eastern in connection with
the proposed transaction under the rules of the SEC. Information
regarding Cambridge's directors
and executive officers is available in its definitive proxy
statement relating to its 2023 Annual Meeting of Shareholders,
which was filed with the SEC on March 16,
2023, and other documents filed by Cambridge with the SEC. Information regarding
Eastern's directors and executive officers is available in its
definitive proxy statement relating to its 2023 Annual Meeting of
Shareholders, which was filed with the SEC on April 3, 2023, and its Annual Report on Form 10-K
for the year ended December 31, 2022,
which was filed with the Commission on February 24, 2023, and other documents filed by
Eastern with the SEC. Other information regarding the participants
in the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, will be
included in the joint proxy statement/prospectus and other relevant
materials filed with the SEC, which may be obtained free of charge
as described in the preceding paragraph.
Reconciliation of
Non-GAAP Financial Measure:
|
|
|
|
Cambridge Bancorp and
Subsidiaries
|
|
|
|
(unaudited, dollars in
thousands)
|
As of:
|
Tangible book
value:
|
June 30,
2023
|
Total shareholders'
equity (GAAP):
|
$527,004
|
Less: Goodwill &
other intangibles
|
(71,535)
|
Tangible book value
(non-GAAP)
|
$455,469
|
Cambridge Bancorp
Investor contact:
Joseph P. Sapienza
InvestorRelations@cambridgetrust.com
617-520-5520
Media contact:
Danielle Remis Hackel
Danielle.remis@cambridgetrust.com
617-441-1421
Eastern Bankshares, Inc. and Eastern Bank:
Investor contact:
Jill Belliveau
Eastern Bankshares, Inc.
InvestorRelations@easternbank.com
781-598-7920
Media contact:
Andrea Goodman
Eastern Bank
a.goodman@easternbank.com
781-598-7847
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SOURCE Cambridge Bancorp