Berkshire Hills Bancorp Inc. in Pittsfield, Mass., is expanding in New York by acquiring Rome Bancorp Inc.
The companies jointly announced the $74 million cash and stock deal on Tuesday. The $2.7 billion-asset Berkshire would acquire Rome Bancorp and Rome Savings Bank, a subsidiary with $330 million of assets and five branches in New York.
Seventy percent of Rome's outstanding shares would be exchanged at a rate of nearly 0.57 of Berkshire's shares per each Rome share. Berkshire is to pay $11.25 a share in cash for the remaining 30% of Rome's shares.
The price of the deal, based on Berkshire's closing price on Oct. 11, is 120% of Rome's tangible book value per share and 19.3 times Rome's trailing 12-month earnings.
"With a 14% premium to the recent price of our stock, the transaction pricing is attractive to our shareholders," Rome's chairman and chief executive, Charles M. Sprock, said in a press release.
With the acquisition, Berkshire would have $3 billion of assets, 46 branches and a total market capitalization of more than $300 million.
