Mechanics Bank in Walnut Creek, Calif., has agreed to buy California Republic Bancorp in Irvine.
The $3.6 billion-asset Mechanics said in a press release last week that it will pay $37.19 a share for the $1.8 billion-asset California Republic. The deal value would be roughly $300 million based on California Republic’s shares outstanding. The deal is expected to close in the second half of this year.
California Republic has made a name for itself through auto loan securitizations, with origination operations in 14 states. The company had recently discussed plans for a national push into indirect auto lending.
"Mechanics Bank has plenty of capital and capacity, and [California Republic] is an extraordinarily effective and efficient asset generator," Ken Russell, Mechanic’s president and chief executive, said in the release. "We both are committed to a very personal and high-touch, relationship-based form of banking, and both banks fill niches that big banks can’t."
A private-equity group, co-managed by Gerald J. Ford and Carl Webb, last year completed a tender offer to buy the majority of Mechanics’ shares. The investment — the first from the group's $755 million Ford Financial Fund II — was intended to provide a beachhead to enter the West Coast's increasingly competitive bank M&A market.
Keefe, Bruyette & Woods and Sheppard, Mullin, Richter & Hampton advised California Republic. Wachtell, Lipton, Rosen & Katz advised Mechanics.