Banc of California to acquire Pacific Mercantile Bancorp

The all-stock transaction is valued at approximately USD 235 million, or USD 9.77 per share, based on the closing price for Banc of California’s common stock of USD 19.54 as of 22 March 2021. Banc of California expects the transaction to be 12.9% accretive to EPS in 2022 with a 2.3-year earnback period to tangible book value per share based on a conservative and achievable cost savings estimate of approximately 35%.

Under the terms of the definitive agreement, which was approved by the Board of Directors of both companies, holders of Pacific Mercantile common stock will receive 0.5 shares of Banc of California common stock for each share of Pacific Mercantile common stock they own. Existing Banc of California stockholders will own approximately 81% of the outstanding shares of the combined company and Pacific Mercantile shareholders are expected to own approximately 19%.

The transaction is expected to close in the third quarter of 2021, subject to satisfaction of customary closing conditions, including regulatory approvals and shareholder approvals from Banc of California and Pacific Mercantile shareholders.