September 11, 2013: Umpqua Holdings Corporation has agreed to buy Sterling Financial Corporation in a cash and stock deal valued at $2 billion. Private equity firms Thomas H. Lee Partners and Warburg Pincus, each owning approximately 20.8% of Sterling’s common stock have agreed to vote in favor of the acquisition. Under the terms of the deal, Sterling shareholders will get 1.671 shares of Umpqua common stock and $2.18 cash in cash per Sterling common stock. The value of merger is $30.52 based on closing price of Umpqua shares on September 11, 2013 of $16.96. Upon completion of the transaction, Umpqua shareholders will own 51% and Sterling will own 49% of the combined company.
The merger will create one of the largest community banks, with nearly $22 billion in assets, $15 billion in loans and $16 billion in deposits. The combined company will operate under the Umpqua brand in 394 locations across five states including – Oregon, Washington, Idaho, California and Nevada.. THL and Warburg will nominate a representative from their firms to serve on the newly constituted board of directors consisting of 13 members. THL and Warburg had invested in Sterling Financial in 2010.