Berkshire Hills to Acquire Firestone Financial
PITTSFIELD — Berkshire Hills Bancorp Inc. announced the signing of a definitive agreement for the acquisition of privately held Firestone Financial Corp., based in Needham and specializing in commercial lending, as an operating subsidiary of Berkshire Bank.
“Firestone is a terrific fit for Berkshire Bank,” said Berkshire CEO Michael Daly. “The strength of the management team and their conservative approach to credit has made them a solid-performing finance company. Our strategic decision to complement our strong, asset-based lending platform with this commercial-lending business enables us to further diversify our assets while expanding our client offerings. We look forward to adding Firestone’s expertise to our organization, and taking advantage of the synergies available through this acquisition.”
Added George Bacigalupo, Berkshire’s executive vice president of Commercial Banking, “we are pleased to expand our commercial platform with this attractive acquisition. The addition of Firestone enhances both the geographic and categorical diversification of our loan portfolio while providing a valuable additional growth channel for us. The business will continue to be run by Firestone’s talented management team, and their experience and conservative, relationship-based approach makes this a great fit for our organization.”
Firestone CEO David Cohen said he is “excited to be joining the Berkshire team. With Berkshire’s resources behind us, we believe we can be a significant contributor to the continued growth and profitability of this organization. We remain committed to our markets and customers, and through this partnership, we will be able to offer additional services to help facilitate their continued growth.”
At March 31, 2015, Firestone had approximately $190 million in loans outstanding spread across multiple industries and market areas. The acquisition is priced at 130% of Firestone’s adjusted tangible book value. The deal value is estimated to be approximately $53 million, with 75% of the consideration to be paid in BHLB common stock and 25% to be paid in cash.
The acquisition is expected to be accretive to Berkshire’s 2016 earnings per share and to generate a return on equity in excess of 15%. The transaction is expected to be $0.08 dilutive to Berkshire’s tangible book value per share, with a related payback period of approximately 2.5 years. The transaction is subject to the receipt of regulatory approvals and other customary closing conditions and is expected to be completed during the third quarter of 2015.