Columbia Banking buys West Coast Bancorp for $506M
LAKE OSWEGO, Ore. (AP) — Columbia Banking System Inc. said Wednesday it will buy West Coast Bancorp in a $506 million deal that will create a dominant Pacific Northwest bank.
Columbia Banking, based in Tacoma, Wash., is the parent company of Columbia State Bank. It operates 101 branches in Oregon and Washington. West Coast, based in Lake Oswego, Ore., is the parent company for West Coast Bank and West Coast Trust Co. It operates 58 branches in Oregon and Washington.
The combined company will have approximately $7.2 billion in assets and will become the largest commercial community bank in the two state region based on deposits, according to the companies.
Under the terms of the deal, West Coast shareholders will receive a mix of $264.5 million in cash and 12.8 million shares of Columbia stock for their West Coast shares. Based on Columbia's closing stock price of $18.85 on Tuesday, the companies said shareholders would receive a payment valued at roughly $23.10 per share.
West Coast shares closed at $20.18 Tuesday, giving the offer a premium of 14 percent.
Shares of West Coast jumped nearly 10 percent to $22.14 in afternoon trading on the news. Earlier the stock hit a 52-week high of $22.75. Columbia Banking's shares dipped 87 cents, or 4.6 percent, to $17.98.
West Coast shareholders will own approximately 24 percent of the common stock of the combined company.
"This merger is a rare fit of two high quality organizations with similar business models, cultures and values. We think the transaction will provide outstanding benefits to our customers, communities, shareholders, and other constituencies, along with enhancing our proven approach to community banking," West Coast CEO Robert Sznewajs said in a statement.
Sznewajs will retire following once the companies are integrated, and Hadley Robbins, West Coast's chief credit officer, will take over as group manager for Oregon of the combined organization. One independent member of West Coast's current board will join Columbia's board of directors. The companies did not identify further executive leaders.
The banks expect to complete the deal in the first quarter of 2013 following shareholder and regulatory approval. The boards of both companies have already approved the transaction.
Columbia expects the deal will be add to earnings immediately.