Four Firms Bank Roles on $2 Billion Sterling Financial Sale
Four big firms are cashing in with roles on a deal announced Thursday in which Umpqua Holdings, parent company for the largest bank based in Oregon, has agreed to buy Spokane, Washington–based lender Sterling Financial for roughly $2 billion in cash and stock.
Portland, Oregon–based Umpqua—which runs both Umpqua Bank and Umpqua Investments—will pay $2.18 and 1.671 of its own shares in exchange for each share of Sterling, a provider of banking services and mortgage lending. The target is backed by private equity firms Thomas H. Lee Partners (THL) and Warburg Pincus, which each hold stakes of about 20.8 percent in the lender.
The combined cash and stock price values Sterling at $30.52 per share—a premium of nearly 15 percent over the company's Wednesday closing price.
The deal would create a bank with roughly $22 billion in assets, $15 billion in loans, and $16 billion in deposits, the companies said in a statement. The combined entity would also have 394 branches spread across California, Idaho, Nevada, Oregon, and Washington. The deal is expected to close in the first half of 2014, pending approval by regulators as well as shareholders of both companies.
Wachtell, Lipton, Rosen & Katz is advising Umpqua on the acquisition with a team led by corporate partners Edward Herlihy and Matthew Guest as well as associate Brandon Price. Executive compensation and benefits partner Jeannemarie O'Brien and tax partner Joshua Holmes are also working on the matter. Umpqua's general counsel is Steven Philpott.
In June, Wachtell helped Umpqua reach agreement on another acquisition—the $158 million purchase of Financial Pacific Holding.
Davis Polk & Wardwell corporate partner William Taylor, based in New York, is taking the lead for Sterling on its sale. Financial institutions partner Margaret Tahyar, executive compensation partner Jeffrey Crandall, tax partner Kathleen Ferrell, and corporate counsel Ajay Lele are also advising. Associates on the deal are Andrew Blau, Cheryl Chan, Boyoon Choi, Kristen Haase, and Alexander Young-Anglim. Sterling's general counsel is Andrew Schultheis, a former Fenwick & West attorney.
The firm also represented Sterling last year in connection with the U.S. Department of the Treasury's public offering of more than 5.7 million Sterling shares for $115 million. The sale was part of the government's efforts to sell off stock in the bank it had purchased as part of its recession-era stimulus programs.
Meanwhile, Kirkland & Ellis and Weil, Gotshal & Manges are serving as counsel to Sterling's private equity backers, Warburg Pincus and THL, respectively. The Kirkland team is led by New York–based corporate partners Eunu Chun, William Sorabella, Sergio Urias, and Christian Nagler. For Weil, M&A partner Michael Aiello and associate Natasha Gopaul are working on the matter in New York, while financial institutions regulatory partner Heath Tarbert is advising in Washington, D.C.