Image source: Private Bancorp.

What: Shares of PrivateBancorp (NASDAQ:PVTB) are surging by nearly 23% as of 10:30 a.m. ET as the company entered into an agreement to be acquired by Canadian bank CIBC (TSX:CM) (NYSE:CM).

So what: The deal calls for CIBC to pay $18.00 in cash and 0.3657 shares of CIBC for every share of PrivateBancorp stock, which amounts to about $45.36 per PrivateBancorp share at the most recent trading price. That's slightly lower than the $47.00 per share figure given in the press release due to a slight decline in CIBC's share price since the announcement.

CIBC finds PrivateBancorp's focus on middle-market commercial clients to be an attractive platform on which it can grow its U.S. operations. Notably, PrivateBancorp has grown its loans at a 16% annualized clip since the peak of the last cycle in 2007.

Now what: Investors expect the deal to go through without a hitch. PrivateBancorp shares trade at a modest 2.8% discount to the offered price, a very small discount for a deal that isn't expected to close until the first quarter of 2017.