Comprehensive M&A data with integrated detailed company information
PacWest takes a shine to El Dorado
Posted on Thursday, 13 September 2018 10:00
PacWest Bancorp is taking over privately-held chartered lender El Dorado Savings Bank in a cash and stock deal worth USD 466.70 million to gain entry to an entirely new banking market.
Strategically, the deal leads to significant deposit shares in the areas currently served and provides a platform to expand commercial activities in northern California and Nevada, as well as revenue opportunities.
The offer equates to USD 3,341 apiece and represents a price multiple of: 2.0x tangible book value (TBV) per share; 27.3x earnings per share (EPS) for the last 12 months; and 22.9x 2019 EPS.
Financial impacts include a TBV earnback of less than three and half years, a core deposit premium of 13.3 per cent and an internal rate of return of more than 17.0 per cent.
Pro forma capital ratios at close, expected in the first quarter of 2019, comprise tangible common equity to tangible assets of 9.4 per cent, common equity tier 1 of 10.8 per cent and leverage of 9.7 per cent.
Founded in 1958, Placerville-headquartered El Dorado has USD 2.20 billion in assets, USD 0.60 billion in loans, and deposits of USD 2.00 billion.
The company, which has an efficiency ratio of 56.1 per cent, maintains 35 branches located primarily in eight northern California and two northern Nevada counties.
As of 30th June 2018, on a pro forma consolidated basis, the combined company would have USD 26.70 billion in assets and 110 branches.
The deal is the tenth-largest acquisition of a US bank announced so far this calendar year, according to Zephyr, the M&A database published by Bureau van Dijk.
Currently, the biggest takeover within the country’s sector is Fifth Third’s purchase of MB Financial for USD 4.70 billion.
© Zephus Ltd