Community Bank System To Acquire Merchants Bancshares For $304 Mln

(RTTNews) - Community Bank System, Inc. (CBU) agreed to acquire Merchants Bancshares, Inc.(MBVT), parent company of Merchants Bank, in a cash and stock transaction for total consideration valued at approximately $304 million. The transaction has been unanimously approved by the boards of directors of both companies.

Under the terms of the agreement, shareholders of Merchants Bancshares will have the option to receive, at their election, consideration per share equal to 0.963 shares of Community Bank System common stock; $40.00 in cash or the combination of 0.6741 shares of Community Bank System common stock and $12.00 in cash, subject to an overall proration to 70% stock and 30% cash.

The cash and stock consideration would be equivalent to $44.02 for each share of Merchants Bancshares common stock based upon the closing price of Community Bank System common stock as of October 21, 2016.

Upon completion of the transaction, the combined company will fully absorb the cost of crossing $10 billion in assets, while providing earnings accretion for Community Bank System shareholders. Community Bank System expects the transaction to be approximately $0.10 per share accretive to 2018 GAAP earnings ($0.17 excluding the impact of crossing $10 billion in assets) and $0.15 per share accretive to 2018 cash earnings ($0.22 excluding the impact of crossing $10 billion in assets).

Community Bank System intends to donate $500,000 to the Merchants Bank Foundation following the completion of the merger to further strengthen the support of the communities Merchants serves.

The merger is expected to close in the second quarter of 2017 and is subject to customary closing conditions, including approval by the shareholders of Merchants Bancshares and required regulatory approvals.