Pacific Capital Bancorp has entered into a definitive agreement with SB Acquisition Company, a wholly owned subsidiary of Ford Financial Fund, for Ford to invest approximately $500m in it as part of overall recapitalization plan.
Pursuant to the definitive agreement, Pacific Capital Bancorp agreed to sell to Ford, at the closing of the investment, 225 million shares of its common stock at a purchase price of $0.20 per share and 455,000 shares of newly created mandatorily convertible participating voting preferred stock at a purchase price of $1,000 per share.
The preferred stock will have a liquidation preference of $1,000 per share and each share of preferred stock will be convertible into a number of shares of the company’s common stock equal to the liquidation preference divided by $0.20.
George Leis, president and CEO of Pacific Capital Bancorp, said: “We expect that the addition of $500m in capital, together with the overall recapitalization plan and rights offering, will substantially strengthen the company’s capital ratios and place it on a firm footing for the future.
“Additionally, this gives us the strength to retain and build our franchise value for the long-term. The combination of Ford’s extensive and highly successful experience in California banking and Pacific Capital’s significant market presence and unique customer service culture will enable us to continue as one of the strongest community banks along the Central Coast.”