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Generations Bancorp NY, Inc. (GBNY) on September 24, 2024, entered a purchase and assumption agreement with ESL Federal Credit Union where ESL will acquire all of the assets and liabilities of Generations Bank for $26.2 million in an all-cash transaction.
ESL will pay Generations about $11.69 per share, based on Generations’ outstanding shares, representing a 6.27% premium from the stock’s last close.
Once the deal is complete, Generations Bank will liquidate, and Generations Bancorp will distribute its assets to its shareholders. Shareholders of Generations Bancorp are expected to receive between $18.00 and $20.00 in cash for each share of stock they own.
The cash payout will likely come in two parts. Most of the payment will be made within six to nine months after the deal closes, with the remaining amount paid out another six to nine months after the first payment.
Generations Bancorp NY is the holding company for Generations Bank, offering a range of banking services including deposits, residential and commercial loans, and financial products, with branches across the Finger Lakes and Western New York regions.
ESL Federal Credit Union is a full-service financial institution offering personal and business banking, mortgage, and wealth management services through its 24-branch network and digital platforms. It is headquartered in Rochester, New York.
The deal is expected to be finalized either by late second quarter or in the third quarter of 2025.
Generations Bancorp’s current Price/Book (TTM) ratio is 0.69, below the sector median of 1.26.
This deal will help ESL Federal Credit Union grow in the Greater Rochester and Finger Lakes area. ESL will offer personal banking, business banking, mortgage services, and wealth management services to people in Seneca, Cayuga, and Orleans Counties, while also expanding in Ontario County.
After the deal is complete, ESL is expected to have about $9.6 billion in total assets and over 30 branches across the Greater Rochester and Finger Lakes region.
Since this is a liquidation situation with significant variability in the potential final payout and the timing of payout, we are not going to track this deal in the Merger Arbitrage Tool.
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Editor’s Note: Baranjot Kaur contributed to this article