By Joshua Burd
The parent company of Provident Bank is set to acquire SB One Bancorp, paving the way for what would be the third-largest lending institution in New Jersey.
The two banks announced Thursday that they’ve entered into a definitive merger agreement, valued at nearly $209 million in stock, to create an organization with about $12 billion in assets. In a news release, Iselin-based Provident said the move would allow it to “cross the $10 billion asset threshold in a meaningful way” and combine two high-performing companies with complementary geographies and business lines.
For instance, the merger provides Provident with entry into markets in Bergen County and Astoria, New York. The transaction is expected to close in the third quarter.
“We are excited about our partnership with SB One,” said Christopher Martin, Provident’s chairman and CEO. “This business combination provides attractive financial attributes to shareholders of both Provident and SB One. At $12 billion in assets, the combined company comfortably surpasses the $10 billion asset threshold and provides Provident a clear management succession plan with the addition of a very skilled leader and banker in Tony Labozzetta, who will serve as President and Chief Operating Officer of the combined company.”
Provident will acquire all outstanding shares of SB One in exchange for common shares of Provident, the news release said. The exchange ratio will be fixed at 1.357 Provident shares for each share of SB One, resulting in an aggregate transaction value of roughly $208.9 million, based on Provident’s closing stock price on March 11.
The transaction consideration is presently valued at $22.09 per share for SB One shareholders.
“Provident and SB One are two healthy and vibrant financial institutions who will be even stronger as one,” said Edward J. Leppert, boar chairman of SB One. “This merger makes strategic, cultural, and fiscal sense. We could not be happier about becoming part of the Provident family and look forward to the many benefits this union will have for our customers, employees, and shareholders.”
Labozzetta, SB One’s CEO and president, added: “The merger between our two companies creates the size and scale necessary to compete in the markets that we serve. I am excited to help lead the franchise into the future with talented bankers from both of our organizations.”
The merger is subject to satisfaction of customary closing conditions, including receipt of required regulatory approvals and approval by the shareholders of SB One, the news release said. The banks also noted that Labozzetta and two additional SB One directors will join the boards of directors of Provident and Provident Bank
Piper Sandler & Co. served as financial adviser and Luse Gorman PC provided legal counsel to Provident. Keefe, Bruyette & Woods, A Stifel Company, served as financial adviser and Hogan Lovells US LLP served as legal counsel to SB One.