By Joshua Burd
Valley National Bancorp has moved to expand its foothold in Bergen and Hudson counties, agreeing to acquire Oritani Financial Corp. for an estimated $740 million.
The Wayne-based company, the parent of Valley National Bank, on Wednesday announced that it has entered into a merger agreement with Washington Township-based Oritani. With the acquisition slated to close late this year, the combined entities will have some $37 billion in assets, $29 billion in loans and 245 branches, nearly two-thirds of which will be in New Jersey.
The deal will allow Valley to double its market share in demographically attractive Bergen County and enhance its presence in Hudson County.
“Oritani’s conservative credit culture, combined with their customer focus should mesh seamlessly with that of Valley and our vision forward,” said Ira Robbins, Valley’s CEO and president. “I want to thank Kevin Lynch and his entire Oritani team for being responsible stewards of the franchise and balance sheet during his tenure. This capital-enriching transaction will enable Valley to continue to focus on improving the growth profile throughout its entire franchise, while providing enhanced products, services and delivery channels to Oritani’s existing customer base.
“We are excited about this in-market combination and the synergies that it will bring us.”
Under the terms of the deal, the common shareholders of Oritani will receive 1.60 shares of Valley common stock for each Oritani share they own. The boards of directors of both companies unanimously approved the merger, according to a news release, which noted that the transaction is subject to standard regulatory approvals, shareholder approvals from Valley and Oritani, as well as other customary conditions.
Besides expanding Valley’s footprint, the acquisition will also bolster its capital levels, allow for a continuation of accelerated growth at Valley and provide an additional buffer for other forms of potential capital returns in the future, the news release said. Before factoring in the acquisition, Valley has roughly $32.5 billion in assets, $25.4 billion in loans, $24.9 billion in deposits and more than 200 branches in New Jersey, New York, Florida and Alabama.
“We are thrilled about this combination with Valley,” said Kevin Lynch, chairman, CEO and president of Oritani. “The infrastructure that has been assembled at Valley over the past few years will enable our customers to access a substantial product offering while still receiving the local decision making and the exceptional service they have become accustomed to at Oritani.”
Lynch is expected to join the boards of Valley and Valley National Bank upon completion of this transaction.
J.P. Morgan Securities LLC acted as financial adviser to Valley to provide a fairness opinion to Valley National Bancorp’s board of directors, the news release said. The law firm of Day Pitney LLP acted as counsel to Valley, while Oritani was advised by the investment banking firm of Keefe, Bruyette & Woods, a Stifel Company, and the law firm of Luse Gorman PC.