After a year of negotiation, CIBC has completed its acquisition of Chicago-based PrivateBancorp, Inc. and its subsidiary, The PrivateBank.
In a Friday release, CIBC says the total transaction value is approximately US$5 billion, which will be paid with approximately US$2.4 billion in cash and approximately 32.3 million CIBC shares. These values are based, says CIBC, on the closing price on the New York Stock Exchange of CIBC’s common shares on June 22, 2017 of US$80.95.
It adds its U.S. region will operate under a unified CIBC brand, with rebranding activities beginning in the fiscal fourth quarter. Beginning in the fiscal third quarter, CIBC will report financial results for its U.S. region as a separate strategic business unit.
As previously announced, Larry Richman will lead CIBC’s U.S. region as senior executive vice-president and group head of the U.S. Region, as well as president and CEO of The PrivateBank. He will remain president and chief executive officer of The PrivateBank.
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CIBC first announced it was acquiring PrivateBancorp in June 2016, noting in a release at that time that “the transaction will significantly expand CIBC’s reach in North America, and enable PrivateBancorp to continue building on […] growth and client service.”
That news was followed by PrivateBancorp saying, in December of last year, that its shareholders needed more time to consider the transaction on the back of its stock value rising
Then, in May 2017, shareholders voted in favour of the takeover after CIBC proposed PrivateBancorp shareholders would receive US$27.20 in cash and 0.4176 of a CIBC common share for each PrivateBancorp share they hold–that compared to US$18.80 in cash and 0.3657 of a CIBC common share for each share, as was proposed in June 2016.