PacWest Bancorp To Buy CapitalSource For About $2.3 Bln

(RTTNews) - PacWest Bancorp (PACW) said Monday that it has agreed to buy CapitalSource Inc. (CSE) in a deal valued at about $2.3 billion.

Under the terms of deal, CapitalSource shareholders will receive $2.47 in cash and 0.2837 shares of PacWest common stock for each share of CapitalSource common stock. The total value of the CSE per share merger consideration, based on the closing price of PacWest shares on July 19 of $32.32, is $11.64.

Upon closing of the deal, existing shareholders of PacWest are expected to own about 45% of the outstanding shares of the combined company and CapitalSource shareholders are expected to own about 55%.

CapitalSource Inc., headquartered in Los Angeles, California, is the parent of CapitalSource Bank, a California Industrial Bank with about $8.7 billion in assets at June 30, 2013 and 21 branches located in southern and central California. In connection with the deal, CapitalSource Bank will be merged into Pacific Western Bank, the Los Angeles-based wholly-owned subsidiary of PacWest Bancorp. Pacific Western Bank had $6.7 billion in assets at June 30, 2013 and 75 branches across ten California counties.

As of June 30, on a pro forma consolidated basis, the combined company would have had about $15.4 billion in assets with 96 branches throughout California.

Matt Wagner, CEO of PacWest Bancorp and Chairman and CEO of Pacific Western Bank, will be CEO of the combined company and of Pacific Western Bank. James Pieczynski, Chief Executive Officer of CapitalSource, will become President of the new CapitalSource division of Pacific Western Bank, incorporating all of the current CapitalSource lending operations. John Eggemeyer, Chairman of PacWest Bancorp, will become Chairman of the combined company.

The deal is currently expected to close in the first quarter of 2014.