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New Jersey business merger: Struggling bank gets bought out

Investors Bancorp has bought out Roma Financial Corp., which has been doing business in New Jersey for approximately 92 years. The business merger comes at a time when Roma Financial was struggling to survive. Both companies saw an opportunity and decided to take it.

New Jersey based Investors Bancorp is the parent company of the Investors Bank network. Since June 2008, Investors has made approximately seven similar buyouts that have nearly doubled its assets. With the addition of Roma Financial, Investors will be adding approximately $1.84 billion in assets and $1.5 billion in deposits to its already lucrative portfolio. Roma Financial's 26 branches will be added to the 102 branches Investors already has.

The buyout is worth approximately $452 million according to Investors' CEO. It will be an all stock purchase. Stripping the deal to its bare bones, Investors is buying out Roma Financial for about 25 to 30 cents on the dollar since Roma Financial owns about 75 percent of its own stock. This deal will put Investors closer to reaching its goal of being a publicly traded company.

There has been no indication of how the merger will affect Roma Finanicial's approximately 317 full-time employees and 27 part-time employees. However, it was revealed that three of Roma Financial's directors are joining Investors' board. The remainder of Roma Financial's directors are said to be joining an advisory panel at Investors.

There are many struggling companies like Roma Financial that are looking for a buyout rather than having to close their doors. Once a buyer can be found, the details of the business merger need to be carefully negotiated and documented. Just because a company is in a dire situation doesn't necessarily mean that it can't negotiate. Any struggling company facing a business merger may benefit from advice and assistance in order to make sure that they are treated fairly and that all applicable laws and regulations are adhered to in the documentation of the merger .

Source: Nj.com, "Investors Bank to buy Roma Financial in latest N.J. bank merger," Ed Beeson, Dec. 20, 2012

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