Canadian Imperial (CM) Completes PrivateBancorp Deal For $5B
Zacks Investment Research | Jun 26, 2017 09:13PM ET
Canadian Imperial Bank of Commerce (TO:CM) has finally completed the much-awaited acquisition of PrivateBancorp, Inc. on Jun 23, 2017 for $5 billion. Per the deal, which is expected to be accretive to CIBC’s earnings per share within three years, the company will pay $2.4 billion in cash and roughly 32.3 million of its shares.
This acquisition is the largest for CIBC since inception and will likely help it move forward with its growth plans in the U.S.
CIBC’s President and CEO, Victor Dodig, said, "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. Our shared passion and commitment to fostering a client-first culture, will serve us well as we work to build integrated U.S. businesses and establish CIBC as a strong, innovative relationship-oriented North American bank."
Though shares of CIBC declined nearly 1.1% following the deal closure announcement, it actually gained 2.2% since the deal got confirmed on May 12 with the approval of shareholders. Before this approval, the deal was amended twice, for PrivateBancorp to consider it fruitful enough.
CIBC will operate PrivateBancorp under its own name with some rebranding starting in the fiscal fourth quarter.
Larry Richman, President and CEO of PrivateBancorp will become Senior Executive Vice-President and Group Head for CIBC’s U.S. region.
He said, "On behalf of The PrivateBank team, we are delighted to be joining CIBC”.
Richman added, "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. 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."
Notably, in the last one year, shares of Canadian Imperial have increased 2.6%, significantly underperforming the Zacks categorized Zacks Investment Research
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