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Warburg Pincus, THL sell Sterling Financial stakes in $2bn Umpqua buyout

12 Sep 2013

dollars10_sqPrivate equity players Warburg Pincus and Thomas H Lee Partners have agreed to sell their stakes in Sterling Financial to Umpqua, which is paying $2bn for the business in a cash and stock deal.

Both firms held stakes of about 20.5 per cent after Warburg bought into the business in 2010 through a $139m investment.

THL Partners had previously invested $170m, and said at the time it would adjust the size of its investment to equal that of Warburg.

Umpqua’s buyout saw shareholders receive 1.671 shares in Umpqua and $2.18 in cash for each share of Sterling common stock, roughly equating to $30.5 based on Umpqua’s Wednesday closing price.

Warburg vice chairman David Coulter said, “We have been very pleased with what Sterling has achieved since we made our investment in 2010, and are delighted with the decision to combine with Umpqua.

“Umpqua has a long record of achievement and creating shareholder value, and together with Sterling will create what we believe will be the leading community bank in the West.”

THL managing director Josh Bresler added, “The great potential that initially attracted us to making a significant investment in Sterling three years ago has been realized through the successful efforts of Greg Seibly and the entire Sterling team, and the merger with Umpqua is the logical next step for Sterling.

“The merger pairs two companies with exceptional management teams and franchises, and we believe it will create substantial value for us and all of the shareholders of both companies.”

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