After more than a year of searching for an acquisition, People’s United Financial has pulled the trigger on a deal.
People’s United, the parent company to Bridgeport-based People’s Bank, said today it has agreed to acquire New York-based Financial Federal Corporation in a stock and cash deal valued at $738 million.
Philip R. Sherringham, president and CEO of People’s United said Financial Federal is a leader in equipment financing, which will complement People’s existing business lines, including its capital and leasing segment and equipment financing subsidiary.
He said the acquisition will create the 13th largest U.S. bank-owned equipment-finance business, according to an industry publication, as well as add to operating earnings next year.
“This transaction offers opportunities for People’s United to grow our highly-profitable equipment financing business with established, experienced staff in new markets throughout the country,” Sherringham said in a written statement.
People’s Bank has been holding on to excess cash for awhile and the company has not made it a secret that it was interested in pursuing an acquisition.
In July, company officials said the bank could be willing to accept a deal brokered by the Federal Deposit Insurance Corp., and wouldn’t rule out acquiring a company that is outside of its geographic footprint, including one that is based on the West Coast.
It’s not clear yet if People’s will look for another acquisition beyond the Financial Federal Corp. deal.
Under the terms of the agreement, which has been approved by both companies’ boards of directors, Financial Federal Corp. shareholders will receive $11.27 in cash and one share of People’s United common stock.
Based on the closing price of People’s United on November 20, the transaction is valued at $27.74 per Financial Federal Corporation share.
The actual value per Financial Federal share at the completion of the deal will depend on the share price of People’s United at that time.
The transaction is expected to close in the first quarter of 2010, pending regulatory and shareholder approval.
