Hoping to use funds to accelerate its payback to the U.S. government, National Penn Bancshares (NASDAQ:NPBC) will receive $150 million from Warburg Pincus for some of its newly issued stock.
The deal calls for Warburg to directly purchase National Penn’s shares at $6.05 each, reflecting a 5% discount over the stock’s closing price on Tuesday.
The investor will initially spend $63.3 million, to be funded within 10 days, to acquire 24.8 million shares of National Penn’s common stock.
The remaining $86.7 million will be paid after receipt of regulatory approvals, anticipated for the fourth-quarter of this year.
Pennsylvania’s fourth largest bank holding company, National Penn, which received $150 million in bailout funds from the US government, said it plans to use proceeds from the deal to help repay the US Treasury for the TARP investments.
Remaining funds will be used to help serve customers and further differentiate the company from others in the industry as economic conditions improve, according to National Penn CEO Scott V. Fainor.
After the close of the deal, Warburg will be a top National Penn shareholder, holding 16.4% of its outstanding shares.
As part of the transaction, Warburg’s managing director, Michael E. Martin, who also serves as co-head of Warburg’s financial services group, will join National Penn’s board of directors for an initial term through April 2013.
Martin said the company’s investment in National Penn confirms its “strong financial condition and vibrant regional banking franchise.”
“With the regional banking sector, and National Penn's markets in particular, ripe for consolidation, we believe that National Penn is well-positioned to take advantage of market opportunities and has the right management team to lead and direct its growth,” he said.