NEW YORK (TheStreet) -- Shares of PrivateBancorp (PVTB) are soaring 23.52% to $44.38 on heavy trading volume late Wednesday afternoon after agreeing to be bought by Canadian Imperial Bank of Commerce (CM) in a $3.8 billion cash and stock transaction.
CIBC stock is down 2.22% to $75.40 on heavy trading volume.
CIBC will swap $18.80 in cash and 0.3657 CIBC shares for each share of PrivateBancorp. The agreement values the deal at $47 per share, representing a premium of 31% to PrivateBancorp's Tuesday closing price of $35.93.
The deal grants the middle-market market commercial bank additional financial strength and the ability to provide banking services in Canada, PrivateBancorp CEO Larry Richman said in a statement.
PrivateBancorp has roughly $17.7 billion in assets.
"PrivateBancorp was reaching an inflection point where it was going to be harder for them to continue to grow their assets in the U.S. unless they were on the acquisition trail. It was ripe for consolidation," David Neuhauser, managing director at Livermore Partners, which owns shares of PrivateBancorp, told Reuters.
About 15 million shares of PrivateBancorp have been traded so far today, well above its average trading volume of roughly 715,276 shares per day.
Separately, TheStreet Ratings team rates the stock as a "buy" with a ratings score of B+.
PrivateBancorp's strengths such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, expanding profit margins and good cash flow from operations outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value.
You can view the full analysis from the report here: PVTB
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.