Banc of California Inc. (NYSE: BANC) and PacWest Bancorp (NASDAQ: PACW) have signed a definitive agreement to enact an all-stock merger transaction.
Under the terms of the agreement, PacWest will merge into Banc of California, and Banc of California, N.A. will merge into Pacific Western Bank. The combined holding company and $36 billion-asset bank will operate under the Banc of California name and brand.
PacWest stockholders will receive 0.6569 of a share of Banc of California common stock for each share of PacWest common stock. Banc of California also reported the buyout groups Warburg Pincus and Centerbridge Partners will invest $400 million in newly issued equity into the merged bank.
Banc of California President and CEO Jared Wolff will retain the same roles at the combined company. John Eggemeyer, who currently serves as the independent lead director on the board of PacWest, will become the chairman of the board of the combined company. following the merger. The board of directors of the combined company will consist of 12 directors: eight from the existing Banc of California board, three from the existing PacWest board and one from Warburg Investors.
“This transformational merger will create a robust, well-capitalized and highly liquid institution poised to deliver exceptional service to even more California businesses and communities,” said Wolff. “We believe both Banc of California and PacWest stockholders will benefit from the compelling economics of the combined company and its enhanced ability to deliver profitable and sustainable growth. Out of the gate, the combined company will have the strength and market position to support the banking needs of small and medium-size businesses in California and to capitalize on the opportunities created for stronger financial institutions in the wake of the recent banking industry turmoil.”
“This merger is a tremendous opportunity for PacWest’s stockholders, customers, communities and employees, representing significant immediate and long-term value beyond PacWest’s standalone strategic plan,” said Paul Taylor, president and CEO of PacWest, whose bank was among those hit hard during the banking crisis earlier this year. “I am honored and extremely proud of the PacWest team’s fortitude over the past several months amidst industry-wide volatility. With the combined strength of both institutions, new capital from investors that are committed to the strategic vision and value creation of this merger, and a proven track record of successful integrations, the combined company will be well-positioned to provide significant value for the long term to all of our constituents.”
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