Eastern Bankshares has signed a definitive agreement to acquire Century Bancorp in an all-cash transaction valuing $642m.

The step comes less than six months after Eastern raised nearly $1.7bn in equity capital through an IPO.

Deal Details:

As agreed, Century shareholders will receive $115.28 in cash for each share in the company.

The transaction is expected to complete in the fourth quarter of this year, subject to several closing conditions.

Once the deal closes, Century Bancorp is expected to merge with and into Eastern Bankshares. Concurrently, Century Bancorp’s Century Bank and Trust Company will also merge into Eastern Bank.

About Century Bank and Trust Company:

The $6.4bn Century Bank and Trust Company is a state-chartered full service commercial bank.

It has 27 branches in the Greater Boston area, and focuses on providing business, personal and institutional services.

Benefits of the deal:

With $16bn in total assets, Boston-based Eastern Bank serves its customers through more than 110 locations.

It particularly provides banking, investment and insurance services to communities in eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island.

The deal will create a $22bn combined lender and will bolster Eastern’s position in Boston and Eastern Massachusetts.

Eastern also expects the transaction to be nearly 55% accretive to earnings on a fully synergised basis.

Quotes:

Eastern Bankshares chair of the board and CEO Bob Rivers said: “We’ve admired Century’s success since its founding by Marshall Sloane in 1969 and today they are New England’s largest family-run bank.

“Under the leadership of Barry R. Sloane and Linda Sloane Kay, the Century Bank brand has continued to rise in prominence and it was a proud moment for us when they communicated they wanted to partner with Eastern.

“We are excited for the opportunities this agreement creates and believe our combination will deepen our reach in providing banking services and other support to communities across Greater Boston and southern New Hampshire.”