Sterling Bancorp STL, +1.40% announced Monday an agreement to be acquired by Webster Financial Corp. in a stock deal that values Sterling at more than $5 billion. Sterling shares gained 0.7% in premarket trading while Webster shares were still inactive. Under terms of the agreement, each Sterling shareholders will receive 0.463 Webster shares for each Sterling share they own. Based on Friday’s stock closing prices, that values Sterling shares at $26.56 each, an 11.5% premium. With 193.46 million shares outstanding as of Feb. 25, the deal values Sterling at $5.14 billion. After closing, which is expected to occur in the fourth quarter of 2021, Webster shareholders will own 50.4% of the combined company. The banks expect the deal to add greater than 20% to Webster’s earnings and greater than 10% to Sterling’s earnings, and to result in $120 million in synergies. “This combination provides exceptional financial benefits and enables us to more aggressively invest in key businesses and activities to enhance value for our customers, our communities, our shareholders and our bankers,” said Webster Chief Executive John Ciulla. Sterling’s stock has rallied 32.5% and Webster shares have climbed 36.1% year to date through Friday, while the SPDR Regional Banking ETF KRE, +1.09% has run up 30.3% and the S&P 500 SPX, +0.36% has gained 11.4%.
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