PacWest Bancorp is buying Square 1 Financial in a deal valued at about $789 million.
Square 1 stockholders will receive 0.5997 shares of PacWest common stock for each share of Square 1 common stock. The total value of the transaction is $27.49 per share, based on PacWest's Feb. 27 closing price of $45.84. The companies put the deal's value at approximately $849 million.
Square 1 Financial Inc., based in Durham, North Carolina, is the parent company of Square 1 Bank, and had one banking office in Durham and 12 U.S. loan production offices.
Square 1 Bank will merge with Pacific Western Bank, a Los Angeles subsidiary of PacWest Bancorp. Square 1's lending operations will continue to do business under the Square 1 name as a division of Pacific Western Bank.
"We are confident this transaction with Square 1 represents an excellent opportunity to grow core deposits, expand our nationwide lending platform, and increase our presence in the dynamic technology and life-sciences markets," PacWest Bancorp CEO Mark Wagner said in a printed statement.
PacWest and Square 1 said that the combined business, which will be headquartered in Los Angeles, would be the 6th largest publicly owned bank based in California.
The combined company would've had approximately $19.8 billion in assets as of Dec. 31, 2014, on a pro forma consolidated basis. It would have had 80 branches throughout California and one in North Carolina.
Once the deal closes, one former Square 1 board member will join PacWest's board. PacWest and Square 1 said Monday that the combined company will have senior executives from both businesses in key positions.
The transaction is expected to close in 2015's fourth quarter. It still needs approval from bank regulatory authorities and Square 1 stockholders.