LGI Homes' executive team has taken to the road in an organized-chaos dash to raise commitments from institutional investor decision-makers to buy 9 million initial public offering shares of stock in the newly formed LGIH, to list on the Nasdaq Global Select Market.
The team, which has been putting the pieces for this moment together for well on to three years or more, would not be daunted by the midyear turn in housing momentum, largely tracing to the eventual withdrawal of Federal Reserve monetary accommodations that have help to keep mortgage interest rates at historical low points for much of recent memory. Nor would ceo Eric Lipar and his trusted executive team of chief financial officer Charles Merdian, president and coo Michael Snider, and Jack Lipar, evp and director of acquisitions, flinch at policy uncertainty, housing finance regulatory clouds, and questions over young buyers' access to mortgage credit.
The Securities and Exchange Commission documents filed yesterday note that LGI seeks to sell 9 million shares, at a proposed value of $13 to $15 each. Here's what the SEC form S-1 says about LGI's plans for use of the proceeds:
We expect to receive net proceeds from this offering of approximately $114.2 million (assuming an initial public offering price of $14.00 per share, which is the midpoint of the price range set forth on the cover page of this prospectus), after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.
We expect to use $36.9 million of the net proceeds from this offering to make a payment to GTIS as the cash portion of the purchase price to acquire all of the joint venture interests of GTIS in the LGI/GTIS Joint Ventures which we do not own, and we expect to use the remainder of the net proceeds for working capital and for general corporate purposes, including the acquisition of land, development of lots and construction of homes.
Here's what to expect here later.