AmericanWest In Business Merger With California Bank
On behalf of The Law Office of Lynnette Ariathurai, A Professional Corporation posted in Mergers & Acquisitions on Thursday, April 5, 2012.
When seeking to expand into new markets or to gain a larger footprint in existing markets, any business has a few options. The first, of course, is to expand the business itself, which may include real estate acquisitions and hiring new employees. Another option, though, is a business merger.
Recently, AmericanWest Bank announced a merger with Security Business Bank. Based in southern California, Security Business Bank has four locations in San Diego. The deal is geared toward increasing the presence of AmericanWest in that region as it seeks to expand across the western part of the United States. Information was not available about how much value the deal would bring to AmericanWest, although it currently has assets of about $2.3 billion along with deposits of about $2 billion.
When deciding to pursue a merger, a business may take into account numerous factors. In this case, it appears that part of what appealed to AmericanWest about Security Business Bank was not only its location, but also its culture. In a statement announcing the deal, the CEO of AmericanWest noted that the two banks share the same core values.
However, a business merger involves a number of complicated issues that take time and due diligence to resolve. Those who own equity may either need to be bought out or allowed to exchange their shares. In this case, the shareholders of Security Business Bancorp will receive about $26 million in cash. In addition, the two banks will need to work out a corporate structure plan that will allow them to operate as a single entity and ensure that AmericanWest is able to successfully expand into southern California.
Source: Puget Sound Business Journal, "AmericanWest Bank to merge with Security Business Bank," March 27, 2012