American bank holding company WSFS Financial has reached an agreement to acquire Beneficial Bancorp. The deal is a cash and stock transaction valued at about $1.5bn.
As per the agreement, Beneficial Bank, the wholly owned subsidiary of Beneficial, will merge into WSFS Bank, a wholly owned subsidiary of WSFS, creating a $13bn community bank for the Greater Delaware Valley.
Established in 1853, Beneficial manages 72 offices, including 61 bank branches.
For each share of Beneficial’s stock, its stockholders will receive 0.3013 shares of WSFS common stock and $2.93 in cash.
WSFS chairman, president and CEO Mark Turner said: “This is an historic combination. As a native Philadelphian and a lifelong resident of the Delaware Valley, I believe this combination provides a compelling opportunity to serve our combined markets as it fills a long-standing gap between big banks and smaller community banks in this market.”
Beneficial president and CEO Gerard Cuddy said: “We strongly believe there is value in partnering with WSFS and combining the strengths of our institutions. This is a sound decision for Beneficial, our stockholders, our employees and the communities we serve.
“We are combining with WSFS because it is an established institution with deep roots in the Delaware Valley, shares our values, and has the utmost respect for Beneficial’s legacy.”
Moreover, this is WSFS’ eighth acquisition since 2010. Previous deals include traditional banks and other fee-based businesses in south-eastern Pennsylvania and Delaware.
Upon completion of the merger, WSFS will consolidate nearly 25% of the combined physical banking offices. This is set to happen over the next 12 to 24 months due to geographic overlap and changing customers’ requirements.
Additionally, WSFS will spend an incremental $32m, or almost 50% of the estimated cost savings, into a five-year transformational investment.
Post acquisition, Beneficial president and CEO Gerard Cuddy will assume the role of vice chairman of WSFS Bank. In addition, he will join the boards of directors of WSFS Financial and WSFS Bank. He will be joined by with two mutually agreed upon current directors of Beneficial’s board.