London, Ont.-based PWC Capital Inc. and its subsidiary VersaBank have agreed to merge in order to position the bank for future growth. The combined entity will continue to be named VersaBank.
VersaBank, formerly Pacific & Western Bank of Canada, operates a “branchless” electronic bank, and provides residential and commercial mortgages both through brokers and its own lending staff.
PWC Capital currently owns approximately 62.8% of VersaBank’s common shares.
Assuming that the deal is approved, it’s expected that existing shareholders and lenders of PWC Capital will own 64.9% of the combined firm, and VersaBank’s current shareholders will own the rest.
“The combined entity should benefit from a simplified structure, increased liquidity and greater access to capital. The management team is enthusiastic to be in a position to turn its full attention to deliver on VersaBank’s business plans and growth initiatives once the transaction is completed,” said David Taylor, president and CEO of PWC Capital and VersaBank, in a news release.
The transaction follows a strategic review process that both firms undertook earlier this year. The board of directors of each company is recommending in favour of the deal, which requires shareholder, regulatory, and court approval.
The deal is expected to close in the first quarter of 2017.