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Taylor Morrison lodges USD 2.4bn for William Lyon
Posted on Wednesday, 06 November 2019 14:24
Taylor Morrison Home is taking William Lyon Homes private for USD 2.40 billion to enter three new attractive cities while creating the fifth-largest homebuilder in the US with a top five position in 16 of the combined 23 markets.
According the presentation, the payment comprises: USD 855.00 million of equity; USD 1.25 billion of revolving credit facility and senior notes; USD 140.00 million of joint venture-related and other debt; and USD 140.00 million of non-controlling interest.
The cash and scrip offer of USD 21.45 represents a premium of 11.1 per cent to William Lyon’s last unaffected closing price of USD 19.30, though its stock is already up 8.7 per cent by 09:13 ET in pre-market trading on the announcement.
Its shareholders will end up owning 23.0 per cent of the combined group, which will have a pro forma market capitalisation of USD 6.80 billion, as at 30th September 2019.
Through the deal, Taylor Morrison will scale up in key existing markets like Colorado, Texas and California, while entering Nevada and the Pacific Northwest states of Washington and Oregon.
On a combined basis, the group had pro forma home deliveries of 14,222 in the last 12 months ended 30th September 2019 and an adjusted margin for earnings before interest, tax, depreciation and amortisation of over 11.0 per cent.
Taylor Morrison noted the acquisition will increase exposure to the entry-level segment; boosting this category from 28.0 per cent of the portfolio to representing 36.0 per cent of the enlarged company’s product mix.
Zephyr, the M&A database published by Bureau van Dijk, shows the deal is the fifth-largest public takeover on record targeting the global residential building construction sector.
At USD 9.30 billion, Lennar’s delisting of CalAtlantic in 2018 is the biggest, followed by Barratt Development’s acquisition of Wilson Bowden for USD 4.41 billion in 2007.
© Zephus Ltd