THL Partners has agreed to increase its proposed investment in Sterling Financial Corp. (Nasdaq: STSA) from $134.7 million to $175 million.
Sterling Financial Corp. (NASDAQ:STSA), (“Sterling”), and Thomas H. Lee Partners, L.P. (“THL”) announced today that THL intends to increase the size of its proposed investment in Sterling to $170 million, subject to the approval of the U.S. Treasury under the terms of the previously announced exchange agreement with Sterling.
“Management’s Discussion and Analysis of Financial Condition and Results of Operations”
If approved, THL would purchase shares of common stock and shares of a newly-created Series B convertible participating voting preferred stock at a price of up to $0.20 per share of common stock and up to $92.00 per share of Series B stock, each of which would be mandatorily convertible into 460 shares of common stock.
THL would also receive a warrant with a seven-year term to purchase shares of common stock exercisable at a price of up to $0.22 per share. Following the closing of the transactions contemplated by the THL agreement and the exchange agreement, THL would own 24.9 percent of Sterling on an as-converted basis and fully exercised basis.
The terms of the agreements with THL and Treasury, which are described in Sterling’s press release of April 27, 2010, would be revised to reflect the increased size of investment following Treasury approval and certain other technical matters relating to the transaction.
The THL and Treasury transactions are conditioned upon each other and on the other closing conditions previously described, including the raise by Sterling of a total of at least $720 million (inclusive of the THL investment), which will enable Sterling to meet all of its regulatory capital requirements.
About Sterling Financial Corporation
Sterling Financial Corporation of Spokane, Wash., is the bank holding company for Sterling Savings Bank, a commercial bank, and Golf Savings Bank, a savings bank focused on single-family mortgage originations. Both banks are state chartered and federally insured. Sterling offers banking products and services, mortgage lending, construction financing and investment products to individuals, small businesses, commercial organizations and corporations. As of March 31, 2010, Sterling Financial Corporation had assets of $10.55 billion and operated 178 depository branches throughout Washington, Oregon, Idaho, Montana and California. Visit Sterling’s website at www.sterlingfinancialcorporation-spokane.com.
About Thomas H. Lee Partners, L.P. (“THL”)
THL is one of the oldest and most successful private equity investment firms in the United States. Since its establishment in 1974, THL has been the preeminent growth buyout firm, raising approximately $22 billion of equity capital, investing in more than 100 businesses with an aggregate purchase price of more than $125 billion. Notable transactions sponsored by THL include Aramark, Ceridian, Dunkin’ Brands, Experian, FIS, HomeSide Lending, Houghton Mifflin, Michael Foods, The Nielsen Company, Snapple, Warner Chilcott, Warner Music Group and West Corporation.
The issuance of the securities in the transactions described in this release have not been and will not be registered under the Securities Act of 1933 or any state securities laws, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state securities laws. This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any jurisdiction or state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction or state.