TIDMBH29
RNS Number : 7208C
Canadian Imperial Bank of Commerce
29 June 2016
Regulatory Announcement
Canadian Imperial Bank of Commerce ("CIBC")
29 June 2016
CIBC to Acquire PrivateBancorp, Inc.
Expands U.S. presence with high-quality middle market commercial
and private banking capabilities, advances client-focused strategy,
diversifies earnings and strengthens platform for long-term
growth:
-- Provides CIBC's Canadian clients with access to U.S. banking services
-- Supports Atlantic Trust's clients with access to banking capabilities
-- Builds on PrivateBancorp's momentum, offers growth
opportunities as part of a stronger North American organization
CIBC (TSX: CM) (NYSE: CM) today announced that it has entered
into a definitive agreement to acquire PrivateBancorp, Inc.
(NASDAQ: PVTB) and its subsidiary, The PrivateBank, a high-quality
Chicago-based middle market commercial bank with US$17.7 billion in
assets, complemented by private banking and wealth management
capabilities.
The transaction will significantly expand CIBC's reach in North
America, and enable PrivateBancorp to continue building on its
record of growth and client service under the leadership of its
current management team. The acquisition will create a platform for
CIBC to deliver U.S. banking services to its existing Canadian
personal and business banking clients, accept deposits in the U.S.,
and provide commercial and private banking services to the clients
of Atlantic Trust, following receipt of required approvals.
Atlantic Trust, a leading U.S. private wealth management firm
serving high net worth families, private foundations and
endowments, was acquired by CIBC in fiscal 2014. For
PrivateBancorp, the transaction will bring added financial
strength, the benefits of a larger banking enterprise and deeper
wealth management expertise to its clients across the U.S.
CIBC will pay US$18.80 in cash and 0.3657 of a CIBC common share
for each share of PrivateBancorp common stock. Based on the June
28, 2016 closing price of CIBC's common shares on the New York
Stock Exchange (US$77.11), the total transaction value is
approximately US$3.8 billion (C$4.9 billion) or US$47.00 of value
per share of PrivateBancorp common stock at announcement.
PrivateBancorp is a high-quality, client-focused, middle market
commercial, private banking, and wealth management organization
with community banking capabilities. PrivateBancorp has
approximately 1,200 employees, a leading presence in its hometown
of Chicago, and a presence in 11 additional attractive U.S.
markets. PrivateBancorp's clients include middle market companies,
as well as business owners, executives, entrepreneurs and families.
PrivateBancorp also delivers specialty banking services to clients
in specific industry segments, including healthcare and
technology.
"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," said Victor G. Dodig, CIBC President and Chief Executive
Officer.
"We see this as a long-term strategic transaction that creates a
platform for growth across North America, expands and deepens our
client relationships, and creates a broader, diversified, and more
valuable CIBC for our shareholders, our clients, and our team."
Mr. Dodig added, "We were attracted to PrivateBancorp for the
quality of its management team and its client-first culture, and
look forward to PrivateBancorp's continued growth with CIBC's
financial backing. With a shared focus to be number one in client
relationships, we will work with PrivateBancorp's President and
CEO, Larry Richman, and his team as we capitalize on the long-term
opportunities ahead for our organizations, people, clients,
business partners and the communities we serve."
Since 2007, The PrivateBank's leadership team has driven
significant organic growth using a high-touch relationship-based
approach, underpinned by strong risk management. As of March 31,
2016 PrivateBancorp had total assets of US$17.7 billion and a 9.8
per cent CET 1 ratio. PrivateBancorp has delivered a compounded
annual loan growth rate of 16 per cent between year-end 2007 and
2015. Following completion of this transaction, Larry Richman will
remain President and CEO of PrivateBancorp and The PrivateBank,
will join CIBC's Executive Committee reporting to CEO Victor Dodig,
and will take on the role of Head of CIBC's U.S. Region, which will
include The PrivateBank, Atlantic Trust, and CIBC's U.S. Corporate
Banking Business.
Larry Richman, President and CEO of PrivateBancorp, said, "Our
team has built a premier commercial and private banking business.
We believe this transaction allows us to not only continue our
success but to achieve even more as our clients benefit from CIBC's
financial strength, and our employees become part of a respected
North American organization that shares our values and is
strategically positioned for long-term growth. We look forward to
extending U.S. banking services to CIBC's Canadian clients and
Atlantic Trust's private wealth clients, in addition to exploring
mutual growth opportunities going forward.
"Additionally, CIBC shares our deep commitment to building
stronger communities and we are pleased that we will be able to
continue our investments in the important areas of financial
education, business development and affordable homeownership. Both
CIBC and PrivateBancorp are committed to investing in the community
and will work together to continue PrivateBancorp's existing
programs and seek opportunities to further make a difference in
this important area."
Additional Transaction Details
The total value of the consideration that PrivateBancorp common
stockholders will receive upon the closing of the transaction will
be based in part on the value of CIBC common shares at closing.
CIBC will satisfy aggregate consideration payable to PrivateBancorp
stockholders by paying approximately US$1.5 billion in cash and
issuing approximately 29.5 million CIBC common shares, representing
an approximately 60 per cent stock and 40 per cent cash mix.
CIBC anticipates completing the transaction during the first
calendar quarter of 2017, subject to satisfaction of customary
closing conditions, including approval by PrivateBancorp's
shareholders and receipt of regulatory approvals.
CIBC expects to maintain a Common Equity Tier (CET) 1 ratio at
closing of at least 10 per cent. CIBC's CET 1 ratio was 10.4 per
cent as at April 30, 2016 and since has been further strengthened
by the receipt of net proceeds of the sale of our interest in
American Century Investments.
The transaction is expected to be accretive to CIBC's adjusted
earnings per share in year 3.
PrivateBancorp will remain headquartered in Chicago and retain
its Illinois state banking charter. CIBC will continue all of
PrivateBancorp's community investment and charitable programs, and
Larry Richman President and Chief Executive Officer and the
PrivateBancorp executive team will continue to lead
PrivateBancorp's efforts to support entrepreneurship, provide
financial solutions and to serve all of its communities.
J.P. Morgan Securities LLC and CIBC World Markets Inc. served as
financial advisors to CIBC in this transaction and J.P. Morgan
Securities LLC provided a fairness opinion to the Board of
Directors of CIBC. Goldman, Sachs & Co. served as exclusive
financial advisor to PrivateBancorp and Sandler O'Neill &
Partners, L.P. provided a fairness opinion to its Board of
Directors.
Mayer Brown LLP, Sidley Austin LLP and Torys LLP acted as
external counsel to CIBC in connection with the Transaction, while
Wachtell, Lipton, Rosen & Katz and Vedder Price acted as
external counsel to Private Bancorp.
Conference Call/Webcast
A conference call is scheduled to take place on June 29, 2016 at
8:00 a.m. (ET), followed by a brief question and answer period with
analysts. Presentation materials will be available at
www.cibc.com.
Interested parties can access this call on a listen-only basis
via telephone in English (416-340-2217 or toll-free 1-866-696-5910,
passcode 8001339) and French (514-861-2909 or toll-free
1-877-405-9213, passcode: 6400958).
A live audio webcast of the conference call will also be
available in English (http://bell.media-server.com/m/p/bgaz5iuc and
French http://bell.media-server.com/m/p/bgaz5iuc/lan/fr).
About CIBC
CIBC is a leading Canadian-based global financial institution
with 11 million personal banking and business clients. Through our
three major business units - Retail and Business Banking, Wealth
Management and Capital Markets - CIBC offers a full range of
products and services through its comprehensive electronic banking
network, branches and offices across Canada with offices in the
United States and around the world. Ongoing news releases and more
information about CIBC can be found at
www.cibc.com/ca/media-centre/ or by following on Twitter @CIBC,
Facebook (www.facebook.com/CIBC) and Instagram @CIBCNow.
About PrivateBancorp, Inc.
PrivateBancorp, Inc., through its subsidiary The PrivateBank,
delivers customized business and personal financial services to
middle-market companies, as well as business owners, executives,
entrepreneurs and families in all of the markets and communities it
serves. The Company has 34 offices in 12 states and, as of March
31, 2016, had US$17.7 billion in assets. The Company's website is
www.theprivatebank.com.
A NOTE ABOUT FORWARD-LOOKING STATEMENTS
From time to time, we make written or oral forward-looking
statements within the meaning of certain securities laws, including
in this news release, in other filings with Canadian securities
regulators or the U.S. Securities and Exchange Commission and in
other communications. All such statements are made pursuant to the
"safe harbour" provisions of, and are intended to be
forward-looking statements under applicable Canadian and U.S.
securities legislation, including the U.S. Private Securities
Litigation Reform Act of 1995. These statements include, but are
not limited to, statements made in the "Core business performance"
and "Making a difference in our Communities" sections of this news
release, and the Management's Discussion and Analysis in our 2015
Annual Report under the heading "Financial performance overview -
Outlook for calendar year 2016" and other statements about our
operations, business lines, financial condition, risk management,
priorities, targets, ongoing objectives, strategies, the regulatory
environment in which we operate and outlook for calendar year 2016
and subsequent periods. Forward-looking statements are typically
identified by the words "believe", "expect", "anticipate",
"intend", "estimate", "forecast", "target", "objective" and other
similar expressions or future or conditional verbs such as "will",
"should", "would" and "could". By their nature, these statements
require us to make assumptions, including the economic assumptions
set out in the "Financial performance overview - Outlook for
calendar year 2016" section of our 2015 Annual Report, as updated
by quarterly reports, and are subject to inherent risks and
uncertainties that may be general or specific. A variety of
factors, many of which are beyond our control, affect our
operations, performance and results, and could cause actual results
to differ materially from the expectations expressed in any of our
forward-looking statements. These factors include: credit, market,
liquidity, strategic, insurance, operational, reputation and legal,
regulatory and environmental risk; the effectiveness and adequacy
of our risk management and valuation models and processes;
legislative or regulatory developments in the jurisdictions where
we operate, including the Dodd-Frank Wall Street Reform and
Consumer Protection Act and the regulations issued and to be issued
thereunder, the Organisation for Economic Co-operation and
Development Common Reporting Standard, and regulatory reforms in
the United Kingdom and Europe, the Basel Committee on Banking
Supervision's global standards for capital and liquidity reform and
those relating to the payments system in Canada; amendments to, and
interpretations of, risk-based capital guidelines and reporting
instructions, and interest rate and liquidity regulatory guidance;
the resolution of legal and regulatory proceedings and related
matters; the effect of changes to accounting standards, rules and
interpretations; changes in our estimates of reserves and
allowances; changes in tax laws; changes to our credit ratings;
political conditions and developments; the possible effect on our
business of international conflicts and the war on terror; natural
disasters, public health emergencies, disruptions to public
infrastructure and other catastrophic events; reliance on third
parties to provide components of our business infrastructure;
potential disruptions to our information technology systems and
services; increasing cyber security risks which may include theft
of assets, unauthorized access to sensitive information, or
operational disruption; social media risk; losses incurred as a
result of internal or external fraud; anti-money laundering; the
accuracy and completeness of information provided to us concerning
clients and counterparties; the failure of third parties to comply
with their obligations to us and our affiliates or associates;
intensifying competition from established competitors and new
entrants in the financial services industry including through
internet and mobile banking; technological change; global capital
market activity; changes in monetary and economic policy; currency
value and interest rate fluctuations, including as a result of
market and oil price volatility; general business and economic
conditions worldwide, as well as in Canada, the U.S. and other
countries where we have operations, including increasing Canadian
household debt levels and global credit risks; our success in
developing and introducing new products and services, expanding
existing distribution channels, developing new distribution
channels and realizing increased revenue from these channels;
changes in client spending and saving habits; our ability to
attract and retain key employees and executives; our ability to
successfully execute our strategies and complete and integrate
acquisitions and joint ventures; and our ability to anticipate and
manage the risks associated with these factors. This list is not
exhaustive of the factors that may affect any of our
forward-looking statements. These and other factors should be
considered carefully and readers should not place undue reliance on
our forward-looking statements. Additional information about these
factors can be found in the "Management of risk" section starting
on page 41 of our 2015 Annual Report. Any forward-looking
statements contained in this news release represent the views of
management only as of the date hereof and are presented for the
purpose of assisting our shareholders and financial analysts in
understanding our financial position, objectives and priorities and
anticipated financial performance as at and for the periods ended
on the dates presented, and may not be appropriate for other
purposes. We do not undertake to update any forward-looking
statement that is contained in this news release or in other
communications except as required by law.
IMPORTANT ADDITIONAL INFORMATION
In connection with the proposed transaction, CIBC will file with
the SEC a Registration Statement on Form F-4 that will include a
Proxy Statement of PrivateBancorp and a Prospectus of CIBC, as well
as other relevant documents concerning the proposed transaction.
The proposed transaction involving CIBC and PrivateBancorp will be
submitted to PrivateBancorp's stockholders for their consideration.
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. STOCKHOLDERS OF PRIVATEBANCORP ARE URGED TO
READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS
REGARDING THE TRANSACTION WHEN IT BECOMES AVAILABLE AND ANY OTHER
RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR
SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION. Stockholders will be able to obtain a free copy of the
definitive proxy statement/prospectus, as well as other filings
containing information about CIBC and PrivateBancorp, without
charge, at the SEC's website (http://www.sec.gov). Copies of the
proxy statement/prospectus and the filings with the SEC that will
be incorporated by reference in the proxy statement/prospectus can
also be obtained, without charge, by directing a request to: CIBC,
Commerce Court, Toronto, Ontario, Canada M5L 1A2, Attention:
Investor Relations, 416 304-8726; or to PrivateBancorp, Inc.,
Investor Relations, 120 S. LaSalle St., Chicago, IL 60603, 312
564-2000.
PARTICIPANTS IN THE SOLICITATION
CIBC, PrivateBancorp, their respective directors and executive
officers and other persons may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information regarding CIBC's directors and executive officers is
available in its Annual Report on Form 40-F for the year ended
October 31, 2015, which was filed with the SEC on December 3, 2015,
and its management proxy circular and notice of annual and special
meeting of shareholders for its 2016 annual and special meeting of
shareholders, which was furnished to the SEC under cover of a Form
6-K filed with the SEC on March 2, 2016. Information regarding
PrivateBancorp's directors and executive officers is available in
PrivateBancorp's proxy statement for its 2016 annual meeting filed
on Schedule 14A, which was filed with SEC on April 8, 2016. Other
information regarding the participants in the proxy solicitation
and a description of their direct and indirect interests, by
security holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials filed with the
SEC. Free copies of this document may be obtained as described in
the preceding paragraph.
SOURCE CIBC - Investor Relations
For further information:
CIBC: John Ferren, SVP, Investor Relations, 416-980-2088,
john.ferren@cibc.com
Kevin Dove, Head, Media Relations, 416-980-8835,
kevin.dove@cibc.com
PrivateBancorp: Jeanette O'Loughlin, Investor Relations,
312-564-6076, joloughlin@theprivatebank.com
Amy Yuhn, Chief Marketing Officer, 312-564-1378,
ayuhn@theprivatebank.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQSEDFUUFMSEDM
(END) Dow Jones Newswires
June 30, 2016 02:00 ET (06:00 GMT)
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