Banknorth Group to acquire Ipswich Bancshares for 1.92 times revenue

Weekly Corporate Growth Report, Mar 11, 2002

Featured Transaction

The Deal: Banknorth Group Inc. has signed a definitive agreement to purchase Ipswich Bancshares Inc. for $41.6 million. According to the agreement, outstanding shares of Ipswich common stock will be converted into the right to receive either $20.50 per share or a number of Banknorth shares determined by dividing $20.50 by the average closing price of Banknorth stock over a specified period. It is intended that 51 percent of the outstanding Ipswich stock will be converted to Banknorth stock and 49 percent will be converted to cash. The deal has been approved by the boards of both companies, but remains subject to approval by Ipswich shareholders and regulatory authorities.

Discussion: Ipswich Bancshares is the holding company for Ipswich Savings Bank, which operates branches in eastern Massachusetts. The bank offers a variety of traditional deposit products, including checking, savings, money market accounts, and certificates of deposit. More than 80 percent of the bank's loans are for residential mortgages.

Banknorth Group has about a half dozen subsidiary banks that provide consumer and business banking through nearly 300 branches in Maine, New Hampshire, Massachusetts, Vermont, New York, and Connecticut. The company provides loans for commercial real estate and residential mortgages. Banknorth also offers mortgage banking, leasing, and brokerage services.

The acquisition expands Banknorth's operations in the Massachusetts area.