Just over a year ago, national homebuilder and developer Taylor Morrison finalized its acquisition of AV Homes in a deal valued at close to $1 billion.
Now, Taylor Morrison is expanding again with another billion-dollar acquisition. This time, Taylor Morrison is set to acquire of one of the nation’s largest homebuilders in the Western United States, William Lyon Homes.
The companies recently announced the deal, stating that it will create the nation’s fifth-largest homebuilder.
“The agreement to acquire William Lyon Homes marks a historic day for Taylor Morrison as we continue to grow our business in smart and meaningful ways,” said Sheryl Palmer, Taylor Morrison president and CEO.
“We’ve long aspired to be in the Pacific Northwest and have looked for the right point of entry at the right time and at the right price—and that’s exactly what this represents,” Palmer continued. This will be our sixth builder acquisition in seven years and a demonstration of the proven discipline and expertise in M&A that we have developed over the years.”
Under the terms of the deal, Taylor Morrison will acquire all of the outstanding shares of William Lyon Homes common stock for a per share consideration of $2.50 in cash and 0.8 shares of Taylor Morrison common stock.
According to the companies, the deal’s parameters imply a value for William Lyon Homes of $21.45 per share or $2.4 billion including assumption of debt.
According to the release, the transaction has been unanimously approved by the boards of directors of both companies and will be submitted to the stockholders of William Lyon Homes for approval. The companies anticipate that the deal will close in the late first quarter or early in the second quarter of 2020.
The acquisition will mark Taylor Morrison’s first entry into Washington, Oregon and Nevada markets, as well as a deeper expansion in already familiar markets of Colorado, Arizona, Texas and California. According to the announcement, the addition will put Taylor Morrison in a top-five position in 16 of the combined 23 markets with an estimated 14,200 closings for the pro forma combined company.
“The combined business will represent a powerhouse of a builder that can meet the strong demand of entry-level and first-time move-up buyers—consumer segments that represent 85 percent of William Lyon’s closings last year,” said William Lyon, William Lyon Homes executive chairman and chairman of the board. “We are excited to join forces with Taylor Morrison and draw upon their proven track record and greater access to scale efficiencies to meet consumer demand with a reputable, quality product.”
“The decision to partner with Taylor Morrison was based on shared strategic alignment, like-minded core values, and a long history of integrity,” he added. “We are confident in the success Taylor Morrison demonstrates through its reputation of leadership, quality construction and unparalleled customer experience and know our teams, our customers and our stockholders will be in good hands.”