SYRACUSE, N.Y.--(BUSINESS WIRE)--
Community Bank System, Inc. (NYSE: CBU) announced today that is has
entered into an agreement to acquire Northeast Retirement Services, Inc.
(“NRS”), a leading provider of plan accounting, transfer agency, fund
administration, trust and retirement plan services. Upon the closing of
the transaction, NRS will become a subsidiary of Benefit Plans
Administrative Services, Inc. (“BPAS”), a wholly-owned subsidiary of
Community Bank System. The cash and stock transaction is valued at
approximately $140 million and is expected to close in the first quarter
of 2017, subject to certain shareholder and regulatory approvals. The
transaction has been unanimously approved by the boards of directors of
both companies.
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BPAS is a national provider of employee benefit related services,
including defined contribution, VEBA/HRA, actuarial and pension
services, and collective investment fund and institutional trust
services.
Founded in 1999, NRS is a privately held corporation based in Woburn,
Massachusetts, focused on providing institutional transfer agency,
master recordkeeping services, custom target date fund administration,
trust product administration and customized reporting services to
institutional clients. Its wholly-owned subsidiary, Global Trust Company
(“GTC”), was chartered in the State of Maine in 2008, as a
non-depository trust company which provides fiduciary services for
collective investment trusts and other products.
The combination of NRS and BPAS will create an organization with over
$80 million in annual revenue, over $50 billion in trust assets and
3,800 retirement and other employee benefit plan administration clients
throughout the United States and Puerto Rico.
“We are very excited to be partnering with NRS, a respected and growing
provider of customized institutional trust services,” said Community
Bank System President and Chief Executive Officer, Mark E. Tryniski.
“The transaction will strengthen and complement our existing BPAS
businesses, and represents an attractive and balanced utilization of our
strong currency and existing surplus capital. We are delighted to
welcome the entire NRS team to the Community Bank System organization
and look forward to the future of the combined company. We are also
pleased that Thomas Forese, President and Chief Executive Officer of
NRS, and the entirety of the current leadership team will continue in
their capacities with NRS after the combination, as an operating
subsidiary of BPAS.”
Thomas Forese, President and Chief Executive Officer of NRS commented,
“Our Board of Directors and senior management team, in considering
various strategic alternatives, placed great value on the compatibility
of Community Bank System’s culture, employees, strategy and leadership
with those of NRS. The transaction also provides excellent value and
liquidity for NRS shareholders. I am extremely proud of our organization
and its legacy of customer service. We are pleased to be joining
Community Bank System, which shares our passion of providing highly
customized and integrated services to clients. NRS remains committed to
supporting the evolving needs of existing and potential clients through
flexible technology and consultative solutions out of our Woburn
facility. We look forward to working closely with BPAS and the entire
Community Bank System organization to complete the transaction. In
short, this partnership is exciting news for our customers, employees,
and shareholders.”
Under the terms of the agreement, shareholders of NRS will receive
consideration of approximately $140 million, in the form of
approximately $70 million of Community Bank System, Inc. common stock
and $70 million in cash. Excluding acquisition-related expenses, it is
expected that the impact of the transaction will be $0.04 accretive to
Community Bank System’s GAAP earnings per share in its first full year
and approximately $0.05 accretive in its second year. Community Bank
System anticipates that the transaction will be approximately $0.16
accretive to its cash earnings per share in the first full year,
excluding acquisition-related expenses, and $0.17 accretive to cash EPS
in its second year.
Raymond James & Associates acted as exclusive financial advisor to
Community Bank System and Cadwalader, Wickersham & Taft LLP acted as its
legal advisor. Loomis & Co. acted as exclusive financial advisor to NRS
and Nutter McClennen & Fish LLP acted as its legal advisor.
Community Bank System, Inc. operates more than 200 customer facilities
across Upstate New York and Northeastern Pennsylvania through its
banking subsidiary, Community Bank, N.A. With assets of approximately
$8.7 billion, the DeWitt, N.Y. headquartered company is among the
country’s 150 largest financial institutions. In addition to a full
range of retail and business banking services, the Company offers
comprehensive financial planning, insurance and wealth management
services. The Company’s Benefit Plans Administrative Services, Inc.
subsidiary is a leading provider of employee benefits administration and
trust services, and actuarial and consulting services to customers on a
national scale. Community Bank System, Inc. is listed on the New York
Stock Exchange and the Company’s stock trades under the symbol CBU. For
more information about Community Bank visit www.communitybankna.com
or http://ir.communitybanksystem.com.
This press release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.The
following factors, among others, could cause the actual results of CBU’s
operations to differ materially from CBU’s expectations: the successful
integration of operations of its acquisitions; competition; changes in
economic conditions, interest rates and financial markets; and changes
in legislation or regulatory requirements.These statements are
based on the current beliefs and expectations of CBU’s management and
CBU does not assume any duty to update forward-looking statements.
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Community Bank System, Inc.
Scott A. Kingsley, 315-445-3121 (Office)
EVP
& Chief Financial Officer
Source: Community Bank System, Inc.