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United Financial will acquire the outstanding shares of CNB Financial for an aggregate purchase price of approximately $25 million, which includes outstanding stock options and warrants.
Under the terms of the agreement, CNB Financial shareholders will have the opportunity to elect to receive either: $10.75 per share in cash for each CNB Financial's share; 0.8257 United Financial's shares for each CNB Financial's share; or a combination of United Financial's common stock and cash, provided that the total cash consideration paid by United Financial to shareholders of CNB Financial equals 50% of the total merger consideration.
All CNB Financial shareholder elections will be subject to the allocation and proration procedures set forth in the merger agreement.
In connection with CNB Financial's execution of a definitive merger agreement with United Financial, CNB Financial and Berkshire Hills Bancorp have mutually agreed to terminate their merger agreement, and will no longer pursue their proposed business combination.
In accordance with the terms of the prior merger agreement between CNB Financial and Berkshire Hills Bancorp, Berkshire Hills Bancorp will receive a termination fee of $970,000 in connection with the parties' mutual termination of the agreement.
United Financial expects that its close proximity to CNB Financial and its familiarity with the CNB management and lending teams will provide for manageable integration risk, achievable synergies, and improved operational efficiency for the combined institution.
Richard Collins will continue as president and CEO for the combined company and Charles Valade will become an executive vice president of United Bank. The boards of directors of United Financial and United Bank will be expanded by one member each to include one current member of CNB Financial's board.
The companies expect to consummate the transaction in the fourth quarter of 2009, subject to customary closing conditions, including regulatory approvals and approval of CNB Financial's shareholders. The holding company will remain headquartered in West Springfield, Massachusetts.
Stifel, Nicolaus & Company, with lead banker Mark Cohen acted as financial advisor for United Financial and Locke Lord Bissell & Liddell, with lead lawyer Douglas Faucette, acted as its legal advisor in the transaction. Keefe, Bruyette & Woods, with lead banker Patricia McJoynt, acted as financial advisor to CNB Financial, and Kilpatrick Stockton, with lead lawyer Scott Brown, acted as its legal advisor.
Mr Collins said: "The strategic combination of our two companies marks United Financial's initial expansion into Worcester County. We have wanted to be in Worcester county for some time and we believe that our brand of banking will fit well with CNB Financial's culture, staff and customers. We look forward to serving the greater Worcester community."
Mr Valade said: "CNB Financial's board of directors determined that combining with United Financial is the right partnership for our shareholders and our franchise. We are very excited about the prospects for the combined organization."
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