People’s United Financial Inc., the holding company for People’s United Bank, is acquiring United Financial Bancorp Inc., the holding company for United Bank, in a 100% stock transaction valued at approximately $759 million.
“We are excited to welcome United Bank to People’s United,” said Jack Barnes, chairman and CEO of Bridgeport-based People’s United Financial. “With the fourth-largest deposit market share in the combined Hartford and Springfield market, a complementary array of commercial and retail capabilities and a shared legacy of community giving, United will solidify our presence in the central Connecticut market and strengthen our franchise in western Massachusetts.”
People’s United Bank maintains about 400 retail locations in Connecticut, New York, Massachusetts, Vermont, New Hampshire and Maine, as well as wealth management and insurance solutions, with more than $48 billion in assets.
Established in 1858 and headquartered in Hartford, United Bank is a full-service community financial services firm with $7.3 billion in assets. The bank has nearly 60 branches concentrated in Connecticut, Massachusetts and Rhode Island, and employs some 700 people.
People’s United has acknowledged that some jobs will likely be cut at United Bank, though precise figures were not made available. According to sources, about 60% of United Bank branches are within two miles of People’s United branches, and nearly 90% are within five miles.
People’s United expects the transaction to be 7 cents accretive to earnings per common share based on fully phased-in cost savings, with a tangible book value earn-back of approximately 2.3 years and an internal rate of return of approximately 18%.
The transaction is expected to close during the fourth quarter, subject to regulatory approvals as well as the approval of United Financial Bancorp Inc. shareholders.
Keefe, Bruyette & Woods Inc. served as financial adviser, and Simpson Thacher & Bartlett LLP served as legal counsel, to People’s United. Sandler O’Neill & Partners served as financial adviser, and Sullivan & Cromwell LLP as legal counsel, to United Financial.