Berkshire Hills to move HQ to Boston as part of latest acquisition
Berkshire Hills Bancorp in Pittsfield, Mass., has agreed to buy Commerce Bancshares in Worcester, Mass.
The $9.3 billion-asset Berkshire Hills said in a press release Monday that it will pay $209 million in stock for the $2.2 billion-asset Commerce. The deal, which is expected to close in the next six to nine months, prices Commerce at 138% of its tangible book value.
Berkshire Hills also said it will move its headquarters to Boston. The move, which requires regulatory approval, should take place in the third quarter.
Commerce has 16 branches, including three in Boston, along with $1.5 billion in loans and $2 billion in deposits.
"We will be able to leverage the strengths of both banks and capitalize on growth opportunities in the attractive, high-growth central and eastern Massachusetts markets,” Michael Daly, Berkshire Hills’ CEO, said in the release.
“Our partnership with Commerce … provides us with the catalyst to not only be the largest regional bank headquartered in Boston, but to also be the first regional bank in two decades to have downtown headquarters,” Daly said.
Berkshire Hills said the deal should be 4% to 5% accretive to its 2018 earnings per share, excluding merger-related costs but including the impact of crossing $10 billion in assets. It should take a year to earn back the deal’s expected 0.7% dilution to tangible book value.
Berkshire Hills also announced that it had raised about $153 million after selling 4.6 million shares of common stock.
Berkshire Hills was advised by J.P. Morgan Securities and Luse Gorman. Commerce was advised by Sandler O'Neill, Nutter McClennen & Fish and Fletcher Tilton.