Webster Financial Corporation (NYSE:WBS) recently announced that, following receipt of regulatory approvals, Warburg Pincus, the global private equity firm, has completed its previously announced $115 million investment in Webster. In accord with the previously announced agreement, the investment includes a direct purchase of newly issued common stock at $10 per share, non-voting perpetual participating preferred stock, and warrants.
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Warburg Pincus invested $40.2 million on July 27, 2009 and today invested the remaining $74.8 million in Webster to purchase 3 million shares of common stock; 44,570 shares of non-voting perpetual participating preferred stock that, following the receipt of shareholder approval, will convert into 4.5 million shares of common stock; 6.8 million seven-year A-Warrants, Series 2, which initially have a strike price of $10.00 per share, with the strike price increasing to $11.50 per share on October 15, 2011 and to $13.00 per share on October 15, 2013; and 4.3 million seven-year B-Warrants, Series 2 with a strike price of $2.50 per share which will only become exercisable and transferable if shareholder approval is not received by February 28, 2010. The B-Warrants, Series 2 will expire immediately upon receipt of shareholder approval. Webster Financial Corporation is the holding company for Webster Bank, National Association. With $17.5 billion in assets, Webster provides business and consumer banking, mortgage, financial planning, trust and investment services through 181 banking offices, 492 ATMs, telephone banking and the Internet. Webster Bank owns the asset-based lending firm Webster Business Credit Corporation, the insurance premium finance company Budget Installment Corp., Center Capital Corporation, an equipment finance company headquartered in Farmington, Conn., and provides health savings account trustee and administrative services through HSA Bank, a division of Webster Bank. Member FDIC and equal housing lender.
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