TORONTO—CIBC said Friday it had completed its US$5-billion acquisition of Chicago-based PrivateBancorp Inc. and its subsidiary, PrivateBank. Initially valued at US$3.8 billion, the stock-and-cash deal for the middle-market lender was first announced a year ago.
The combined US business will be rebranded as CIBC beginning in the fourth quarter. Larry Richman, PrivateBancorp's president and CEO, will run the US division as senior EVP and group head, US region, and and will remain president and CEO of PrivateBank.
“Acquiring PrivateBancorp accelerates our strategy of building a strong, innovative and client-focused bank by creating opportunities to bank across borders for our Canadian clients, and offering more services to our private wealth clients at Atlantic Trust,” Victor G. Dodig, CIBC's president and CEO, said in June 2016. CIBC acquired what was then known as Atlantic Trust Private Wealth Management from Invesco in early 2014.
More recently, Dodig told Reuters that he had been in talks with Richman about a possible acquisition for the past three years. “PrivateBank has always been part of our medium- to long-term strategy,” he said. In a release, Dodig says, “By combining the resources, capabilities and the talented teams of our two organizations, we are creating a strong cross-border platform for CIBC to serve a broader range of clients and deliver growth to our shareholders
The PrivateBank acquisition, CIBC's largest to date, is seen as a vehicle for diversifying away from the Canadian market in addition to bolstering CIBC's US presence. Active in both Canadian and US commercial real estate lending for a number of years, CIBC has the largest exposure to the Canadian residential sector among that country's five biggest banks. Moody's recently downgraded all five of the major Canadian banks on concerns about a housing bubble in Toronto.
The acquisition terms approved by PrivateBancorp's shareholders last month represented the second amendment to CIBC's initial offer, following a revised bid in March that boosted the total price. In May, CIBC increased the cash element to US$27.20 per share while leaving the stock component unchanged.
“From the very beginning, this transaction was about giving us added financial strength and the benefits of a larger banking enterprise to do more for our clients and our communities,” says Richman. “This new combination will, over time, allow us to build a premier North American bank to deliver a broader set of products and services through our differentiated, relationship-based approach.”
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
