A private equity consortium has acquired the government-seized BankUnited Financial, in a transaction facilitated by the FDIC, and recapitalized it with $900 million in new capital. The acquisition was led by John Kanas, the former CEO of North Fork Bancorp, with backing from a consortium of investors including W.L. Ross & Co., The Blackstone Group, The Carlyle Group, Centerbridge Capital Partners, and Wellcome Trust of London. The new bank will assume $12.7 billion in assets and $8.3 billion in non-brokered deposits. The FDIC and BankUnited entered into a loss sharing agreement on approximately $10.7 billion of the assets, which the FDIC expects to cost it about $4.9 billion. The investors were able to circumvent bank ownership rules by taking less than a 24.9% stake each in the bank.
Mr. Kanas and W.L. Ross, like many private equity firms, had expressed interest in acquiring distressed banks for some time and first started looking at BankUnited four months ago. The bank's investors are planning to use the bank as a platform to acquire other distressed banks in Florida and the Southeast. Since the beginning of 2008 34 private equity firms have invested in commercial banks or other similar lending institutions. With no firm having made more than two investments in the sector so far, it shows that private equity is still waiting for the bottom in banks.