Please ensure Javascript is enabled for purposes of website accessibility

Sterling Bancorp Shares Soar As It Agrees to a Buyout

By Sean Williams - Apr 4, 2013 at 2:19PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This marriage of two New York banks looks like a win-win for shareholders on both sides of the aisle.

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Northeast regional bank Sterling Bancorp (STL) shot higher by as much as 16% after it agreed to be purchased by Provident New York Bancorp (NYSE: PBNY).

So what: Provident agreed to buy Sterling in what was valued at $344 million when the deal was announced -- shares of both companies have moved higher since then. Sterling shareholders will be receiving 1.2625 shares of Provident common stock and should expect the deal to close in the fourth quarter. When added to the fold, Provident shareholders will own 53% of the company, and Sterling shareholders the remaining 47%. Provident plans to use an $80 million debt offering to help fund the deal and anticipates it will be accretive to its 2014 EPS.

Now what: The deal really does make sense for both parties involved because they both service small- to medium-sized businesses in the New York metropolitan area. Synergies from the deal should help boost profits as the combined entity will have close to $7 billion in underlying assets. This seems like a win-win for both companies.

Craving more input? Start by adding Sterling Bancorp to your free and personalized Watchlist so you can keep up on the latest news with the company. 

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Sterling Bancorp Stock Quote
Sterling Bancorp
STL

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
322%
 
S&P 500 Returns
116%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.