Independent Bank (Mass.) to Buy Central Bancorp for $54.8M

Independent Bank Corp. (INDB) of Rockland, Mass., has agreed to acquire Central Bancorp (CEBK) of Somerville, Mass., for $54.8 million in cash and stock.

The deal would help Independent Bank, which is the parent company of Rockland Trust, build its presence in Middlesex County.

"This transaction is consistent with our strategy to expand into contiguous, attractive markets where we can capitalize on Rockland's successful business model and brand identity," Christopher Oddleifson, the president and chief executive of Rockland Trust, said in a news release. He added that the deal, which should close in the fourth quarter, is expected to be immediately accretive.

This would be Independent Bank's first acquisition since it bought Benjamin Franklin Bank in Franklin, Mass., in May 2009. The $5 billion-asset company currently has 67 branches throughout eastern Massachusetts and on Cape Cod. The $521 million-asset Central has nine branches.

Central's shares on Tuesday rose nearly 70%, to $30.65 apiece, on unusually high volume for the lightly traded stock. Independent Bank's shares fell less than 1%, to $28.

Under the deal, 60% of Central's outstanding shares would be exchanged for shares of Independent Bank at an exchange ratio subject to limited adjustment. The remaining 40% of Central's shares would be purchased for $32 per share in cash. The transaction is intended to be a tax-free reorganization for federal income purposes, Independent Bank said Tuesday.

John J. Morrissey, a director at Central, also would join the boards for Independent Bank and its subsidiary, Rockland Trust.

Independent Bank was advised by Sandler O'Neill and used Choate Hall & Stewart for legal counsel. Central was advised by Keefe, Bruyette & Woods and its legal counsel was Kilpatrick Townsend & Stockton.