March 2, 2015 / 12:10 PM / in 4 years

PacWest Bancorp to buy Square 1 Financial for about $849 million

(Reuters) - U.S. regional lender PacWest Bancorp (PACW.O) said it would buy Square 1 Financial Inc SQBK.O in an all-stock deal valued at about $849 million, as the bank looks to increase its exposure to the fast-growing technology and life-sciences markets.

Shareholders of Square 1, the holding company for North Carolina-based Square 1 Bank, will receive 0.5997 shares of PacWest common stock for each share held. This equates to $27.49 per share based on PacWest’s Friday close of $45.84.

Square 1 shares closed at $27.68 on Friday. The company went public last March at $18 per share.

“We are confident this transaction with Square 1 represents an excellent opportunity to... increase our presence in the dynamic technology and life-sciences markets,” PacWest Bancorp Chief Executive Matt Wagner said in a statement.

About 70 percent of Square 1’s total commercial loans of $1.30 billion was to the technology and life-science businesses, as of December 2014.

The combined company, which would have about $19.8 billion in assets and 80 branches in California, will remain headquartered in Los Angeles.

The transaction is expected to close in the fourth quarter of 2015, the banks said on Monday.

Jefferies LLC was the financial adviser to PacWest and Sullivan & Cromwell LLP the legal counsel.

Sandler O’Neill was the financial adviser to Square 1, while Wachtell, Lipton, Rosen & Katz was the legal adviser.

Reporting by Avik Das in Bangalore; Editing by Sriraj Kalluvila

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