Wells Fargo & Co. to buy the first security corporation for 1.35 times revenue

Weekly Corporate Growth Report, Apr 17, 2000

The Deal: Less than two weeks after the collapse of the First Security Corps planned merger with Zions Bancorp, Wells Fargo & Co. has announced that it has agreed to purchase First Security for $2.87 billion in stock. The deal will allow Wells Fargo, the nation's seventh-largest banking company, to build its presence in Utah, one of the fastestgrowing states in the West. According to the terms of the agreement, Wells Fargo will exchange 0.355 of its shares for each share of First Security. The deal values First Security at $14.11 a share, a 15.8 percent premium. After the news of the acquisition was announced, shares of First Security rose $1.19, while Wells Fargo slipped 25 cents, to $39.50.

Discussion: First Security Bank operates 400 branches from New Mexico to California offering commercial and retail banking and trust services. The company's retail lending segment includes subsidiary CrossLand Mortgage, which offers residential mortgages in 26 states. First Security's loan portfolio includes residential mortgages, as well as commercial, commercial real estate and consumer loans. Other First Security divisions provide investment management, insurance and corporate financing.

Wells Fargo & Co., the seventh-largest bank in the nation, has more than 6,000 locations across the U.S. The company offers consumer and business banking services, as well as investment services and products, consumer loans, and international trade through Wells Fargo's joint venture with HSBC. In addition to its agreement to acquire First Security, the company has also recently bought Seattle brokerage Ragen MacKenzie.