PacWest Bancorp said private-equity firm CapGen Financial has agreed to acquire about $100 million of newly issued shares of its common stock for $26 a share, a 21% premium to the last five trading-day average closing price.
Shares of the southern California bank-holding company jumped 16% to $26.37 in recent trading.
PacWest Chief Executive Matt Wagner said the new capital will be used for general corporate purposes, to retire debt and "most importantly, to take advantage of growth opportunities as they arise."
He added, "While we didn't need to raise capital, the significant premium paid in recognition of the strength and value of our franchise and the amount of capital offered put PacWest in an enviable position going forward."
Gene Ludwig, managing principal of CapGen, said, "We have long admired PacWest and believe this investment will deliver value over the long term to CapGen, PacWest, its stockholders and employees by, among other things, enabling PacWest to be better positioned to capitalize on future growth opportunities."
CapGen will invest in PacWest through an investment vehicle that will seek to register as a bank-holding company. When the deal is done, the CapGen investment vehicle will own about 12% of PacWest common stock on a fully-diluted basis as of June 30.
The deal requires approval of federal and state banking authorities. It is expected to close in the fourth quarter.
John Rose, principal of CapGen, will join PacWest's board and CapGen will be granted pre-emptive rights in future equity offerings to maintain its percentage ownership.
In July, PacWest reported that its second-quarter net loss widened to $474.5 million, or $17.47 a share, from $272.7 million, or $10.05 a share, in the first quarter. Total interest income slid 7.7% sequentially. Its write-down of goodwill value jumped 77% in the second quarter from the first.