By Lisa Kerner
Charlotte, N.C., May 15 - Berkshire Hills Bancorp, Inc. entered into a definitive agreement to acquire Factory Point Bancorp, Inc. and its subsidiary, the Factory Point National Bank of Manchester Center, in a transaction valued at approximately $82 million.
Factory Point stockholders have the right to elect to receive either 0.5844 of a share of Berkshire Hills common stock or $19.50 in cash in exchange for each share of Factory Point common stock. Under the agreement, 80% of the outstanding Factory Point common shares will be converted into Berkshire Hills common stock, with the balance converting into the cash consideration.
Because the transaction is intended to qualify as a reorganization for federal income tax purposes, the exchange is expected to tax-free.
Both companies' boards of directors have unanimously approved the merger; however, the agreement remains subject to shareholder approval, according to a form 8-K filing with the Securities and Exchange Commission.
The merger is expected to close late in the third quarter or early in the fourth quarter of 2007, after which, one member of Factory Point's board of directors will join the boards of directors of Berkshire Hills and Berkshire Bank.
Once the merger is completed, Berkshire Bank will have a network of 38 full-service branches and 10 insurance agency offices in Massachusetts, New York and Vermont. Berkshire Hills is expected to have total assets of about $2.6 billion and a total market capitalization for its common stock in excess of $350 million.
"Factory Point is within our targeted market area and this transaction is expected to accelerate our long term earnings growth," Berkshire Hills president and chief executive officer Michael P. Daly said in a company news release included in the SEC filing.
"Factory Point is a quality institution, with strong profitability and a low risk profile. It is well located, with good market share in desirable markets and complements our own banking strengths. These markets are proximate to our Berkshire County base, allowing us to provide the local responsiveness that gives us an advantage in competing against larger institutions."
Sandler O'Neill & Partners, L.P. was the financial adviser for Berkshire Hills, and McConnell, Budd & Romano, Inc. advised Factory Point. Muldoon Murphy & Aguggia LLP was outside legal counsel for Berkshire Hills, and Rhoads & Sinon LLP was outside legal counsel for Factory Point.
Factory Point Bancorp is a one-bank holding company whose wholly owned subsidiary, the Factory Point National Bank of Manchester Center, is based in Manchester Center, Vt.
Berkshire Hills Bancorp is a bank holding company for Berkshire Bank and is located in Pittsfield, Mass.
| Acquirer: | Berkshire Hills Bancorp, Inc.
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| Target: | Factory Point Bancorp, Inc.
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| Transaction value: | $82 million
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| Price per share: | 0.5844 of a share of Berkshire Hills common stock or $19.50 in cash
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| Announcement date: | May 15
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| Expected closing: | Third or fourth quarter of 2007
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| Stock price for target: | OTCBB: FAPB.OB: $14.75 on May 14
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