A group of private investors has agreed to buy Radius Bancorp in Boston.
Patriot National Partners, GCP Capital Partners, Endicott Management and BayBoston Capital are part of a group that will buy a 95% stake in Radius for $63 million. Members of Radius’ management and board were also involved in the transaction, which will provide the $744 million-asset company with about $18 million of new capital.
Radius, once known as First Trade Union Bancorp, said in a press release Wednesday that the transaction resolves a regulatory issue by allowing New England Carpenters Pension and Annuity Funds and the Empire State Carpenters Pension Funds, its existing ownership group, to divest control of the bank. The sale should also provide capital for “expansionary purposes,” Radius said.
The pension funds had run afoul of the Dodd-Frank Act’s Volcker Rule, which bars savings and loan holding companies from holding the types of investments that are part of the funds’ ordinary business. The fund would have been considered banking entities if they had maintained their stakes in Radius. At one point, the funds considered taking the company public to address the issue, but the IPO was postponed due to market conditions.
“This recapitalization is an outstanding result for our current ownership group, our clients and employees,” Michael Butler, the company’s president and chief executive, said in the release. “Being able to satisfy our owners’ regulatory requirements while simultaneously adding growth capital … is the best possible outcome.”
Sandler O’Neill advised Radius, and Keefe, Bruyette & Woods served as placement agent. Hogan Lovells provided Radius with legal advice, while Wachtell, Lipton, Rosen & Katz advised Patriot Financial.