People's United Financial Moves to Acquire Suffolk Bancorp

Banking, finance, and taxes

Published: June 27, 2016 11:38 am

Last Updated: January 13, 2020 6:19 am

Suffolk Bancorp (NYSE: SCNB) saw its shares rise over 25% on Monday morning following an acquisition agreement with People’s United Financial Inc. (NASDAQ: PBCT). The companies announced a definitive agreement where People’s United will acquire Suffolk in an all-stock transaction valued at roughly $402 million.

The transaction is subject to customary closing conditions, as well as regulatory and shareholder approval. The transaction is expected to close late in the fourth quarter of 2016.

Under the terms of the agreement, Suffolk shareholders will receive 2.225 shares of People’s United Financial stock for each Suffolk Bancorp share. The transaction is valued at $33.55 per Suffolk Bancorp share, based on the closing price of People’s United’s common stock on June 24.

People’s United expects the transaction to be accretive to earnings, excluding one-time costs, with an internal rate of return of approximately 17% and a tangible book value earn-back under five years.

Jack Barnes, President and CEO of People’s United, commented:

We are proud to welcome Suffolk County National Bank to People’s United Bank. With the 9th largest market share in Suffolk County, a solid relationship-banking approach and loyal, long-tenured customers, Suffolk County National Bank’s strong Long Island presence complements our previous acquisitions and organic growth in the New York Metro area.

Howard C. Bluver, President and CEO of Suffolk, added:

The highly regarded People’s United brand, broad range of products and services and unique positioning across several attractive markets will benefit Suffolk Bancorp shareholders, customers and employees alike. It is also clear to me that our respective community-oriented cultures, devotion to the highest levels of customer service and conservative risk management philosophies align perfectly. We look forward to leveraging the strengths of our combined organizations to create additional value for all of our current and future stakeholders.

Shares of People’s United were last trading down about 6% at $14.12, with a consensus analyst price target of $14.94 and a 52-week trading range of $13.62 to $16.95,

Suffolk shares were last trading up over 27% at $29.91, with a consensus analyst price target of $29.75 and a 52-week trading range of $22.88 to $31.75.