WSFS to skip over $ 10B threshold with Advantageous Acquisition

WSFS Financial in Wilmington, Del., Has agreed to buy Beneficial Bancorp in Philadelphia.

$ 7.1 billion asset WSFS said in a press release Wednesday that it will pay $ 1.5 billion in cash and stock for $ 5.7 billion asset. The deal is expected to close in the first quarter. Predicted to 172% of its material book value.

WSFS said it plans to invest about $ 32 million over the next five years to improve technology and delivery systems to create a “Top-tier physical and digital service platform.” The funds will come from cost cuts in connection with the acquisition.

Beneficial has 72 branches, including 61

in the Philadelphia area. The deal is 10 th acquisition of WSFS since 2010, including banks and fee-based companies.

“As a native philadelphian and a lifelong resident in Delaware Valley, I think this combination provides a convincing opportunity to serve our merged markets, as it fills a long gap between major banks and smaller corporate banks in this market,” said Mark Turner, chairman , CEO and CEO of WSFS.

WSFS said it expects to close a quarter of banks’ branches in the next 12 to 24 months.

The company said it plans to reduce approximately 37% of Beneficial’s annual one-off costs to major part by closing divisions and reducing staff costs. It also expects to amount to $ 146 million in costs related to acquisition and technology investments.

WSFS said it expects a $ 68 million profit to its baseline since 2021, and $ 12 million comes from technical improvements. The business should immediately increase to earnings per share at WSFS, excluding one-off costs and 8% accretive in 2021.

WSFS said it would take about four years to recover the expected 4.3% dilution to its material book value.

“This partnership and our delivery transformation are consistent with our strategic plan,” said Rodger Levenson, WSFS Executive Secretary.

The acquisition “creates an ideal opportunity to transform WSFS customer delivery and back office systems that will secure our competitiveness in a fast-growing financial services sector,” added Levenson, who will succeed Turner as CEO and CEO on January 1, 19659002. WSFS said it will lose about $ 10.5 million in annual revenue revenues as a result of surpassing $ 10 billion in assets.

Gerard Cuddy, Beneficial’s CEO and CEO, would become vice president of WSFS Bank. Cuddy and two other beneficial members of the board would join the WSFS Board.

Boenning & Scattergood and Covington & Burling advised WSFS. Sandler O & # 39; Neill and Kilpatrick Townsend & Stockton benefited.

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