Washington Federal, Inc. entered into a definitive merger agreement to acquire Luther Burbank Corporation for approximately $650 million.
The transaction is subject to approval of shareholders of both Luther Burbank and WAFD, regulatory approval, effectiveness of registration statement, listing approval approval for shares on the Nasdaq Global Market, and other customary closing conditions. The transaction was unanimously approved by the Board of Directors of each of Washington Federal and Luther Burbank. As of May 4, 2023, transaction has been approved by the shareholders of WAFD and LBC. The consummation of the Merger remains subject to customary closing conditions, including receipt of required regulatory approvals. The transaction is expected to close in second calendar quarter of 2023. The transaction is accretive to forward-estimated earnings and capital.
Jeffrey D. Haas and Shawn M. Turner of Holland & Knight LLP acted as legal advisor to Luther Burbank. Andrew J. Schultheis of Davis Wright Tremaine LLP acted as legal advisor to WAFD. Broadridge Corporate Issuer Solutions, Inc. acted as exchange agent to WAFD. Piper Sandler & Co. acted as financial advisor and fairness opinion provider to Luther Burbank. Keefe, Bruyette & Woods, Inc. acted as financial advisor to WAFD. Davis Wright Tremaine LLP acted as due diligence provider to WAFD and Holland & Knight LLP acted as due diligence provider to LBC. Keefe, Bruyette & Woods, Inc. (KBW) also acted as fairness opinion provider to Washington Federal. Washington Federal has engaged MacKenzie Partners, Inc. to assist in distributing proxy materials and soliciting proxies and has agreed to pay a fee of $15,000, including out-of-pocket expenses, for its services to be rendered on behalf of Washington Federal. Pursuant to the KBW engagement agreement, Washington Federal has agreed to pay KBW a total cash fee of $3,600,000, $1,000,000 of which became payable with the rendering of KBW's opinion, and the balance of which is contingent upon the consummation of the merger. Piper Sandler's fee will be 1.10% of the aggregate transaction value, which at the date of announcement was approximately $8.94 million. Piper Sandler also received a $500,000 fee from Luther Burbank upon rendering its opinion, which opinion fee will be credited in full towards the transaction fee which will become payable to Piper Sandler upon closing of the merger.