Warburg Pincus and Thomas H. Lee Partners have revised the terms of their agreements to invest in Sterling Financial (NASDAQ: STSA). The firms now intend to each purchase about 68.4 million shares of common stock and 1.7 million shares of Series B preferred stock, representing about a $171 million purchase price and a 22.6% stake for each firm. The PE investments are part of a $730 million capital raise by the company, which provides banking products and services in the Western U.S.
75 Commercial Banks have received investments from PE firms since the beginning of 2008, according to the PitchBook Platform. Deal activity held steady from 2008 to 2009; there were 23 completed deals in 2008 and 21 in 2009. This year, deal activity has surged as PE firms seize opportunities to turn around and recapitalize struggling banks. The deal count this year has already reached 21 completed deals with 12 deals still in play and still more than 4 months left in the year. The median deal size has also recovered this year at $100 million from $79.55 million last year. The industry has attracted 53 investors since 2008, 33 of which have completed an investment in a commercial bank this year. The most active investors include Stone Point Capital (7 deals), Lightyear Capital (5) and J.C. Flowers (4).