CapitalSource (UNKNOWN:CSE.DL) and PacWest Bancorp (NASDAQ:PACW) are soon to be one and the same. The two companies have agreed to merge, both announced in a joint press release. CapitalSource investors will receive a cash payout of $2.47 and 0.2837 shares of PacWest common stock for each CapitalSource share they hold. This values the latter's stock at $11.68 per share, a nearly 19% premium to its most recent closing price. The total transaction value is estimated at roughly $2.3 billion.

CapitalSource will effectively be folded into its partner -- the combined entity will be known as PacWest Bancorp. Similarly, the former's subsidiary CapitalSource Bank will be subsumed into its counterparty's Pacific Western Bank.

As of the end of June, CapitalSource Bank had $8.7 billion in assets and 21 branches located in California. Those figures for Pacfic Western Bank were $6.7 billion in assets and 75 branches, also situated exclusively in the state.

The deal is expected to close in Q1 2014. It is subject to approval from the shareholders of both firms and from the relevant regulatory bodies.

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