The parent company of Oregon-based Umpqua Bank, Umpqua Holdings will acquire Sterling and merge it into a single entity under the Umpqua Bank name in a transaction valued at $2 billion. At a per-share price of $30.52 for Sterling – made up of $2.18 of cash and 1.671 shares of Umpqua common stock – the transaction represents about a 12.7 percent premium to Wednesday’s opening price.
Following completion of the transaction, which is expected to close during the first half of 2014, Warburg and Thomas H Lee will own shares of Umpqua Bank. The combined bank will have about $22 billion in assets, $15 billion in loans and $16 billion in deposits.
Thomas H Lee invested a reported $170 million in Sterling in 2010. Warburg invested $171 million in the company the same year.
Kirkland and Ellis advised Warburg Pincus in connection with the deal.