Codorus Valley Bancorp, Inc. (NASDAQ: CVLY) witnessed a notable uptick of 16.63% in its stock during the Wednesday session, culminating at $23.95. This surge in Codorus stock coincided with the revelation of merger-related news.
Codorus Valley (CVLY) has formally entered into a definitive agreement with Orrstown Financial Services, Inc. Within the parameters of this agreement, Codorus Valley will undergo a merger with Orrstown in a comprehensive all-stock transaction. The total valuation of this transaction stands at approximately $207.0 million, equivalent to $21.31 per share of CVLY common stock.
This valuation is based on Orrstown common stock’s closing price of $24.35 on December 11, 2023. The mutually agreed-upon “Merger of Equals” transaction aims to establish a preeminent community bank spanning Pennsylvania and Maryland, boasting assets totaling around $5.2 billion and a market capitalization of roughly $460 million.
This amalgamated entity, comprised of 51 branches, will strategically serve desirable markets in Central and Eastern Pennsylvania, along with the Greater Baltimore, Maryland area. The anticipated merger is poised to enhance the pro forma profitability and trading liquidity of the merging entities, generating substantial value for shareholders. The closing of the merger is slated for the third quarter of 2024.
As per the terms outlined in the definitive agreement, each outstanding share of Codorus Valley common stock will be exchanged for the entitlement to receive 0.875 shares of Orrstown common stock. Consequently, Orrstown shareholders will possess approximately 56% of the outstanding shares in the merged company, with Codorus Valley shareholders retaining about 44%.
The combined organization is set to appear on Nasdaq with the identifier “ORRF” post-merger. The fresh entity will function as “Orrstown Financial Services, Inc.,” and the associated bank will adopt the name “Orrstown Bank.” A central administrative hub is planned for Harrisburg, PA, with an operational center designated for York, PA.