It’s been a week for home builder acquisitions. First Ryland announced it had bought Trend Homes in Phoenix, and now Scottsdale, Ariz.–based Taylor Morrison has announced it has a purchase agreement for Texas-based Darling Homes.
Neither Taylor Morrison nor Darling Homes returned Builder's requests for comment, but the announcement says that the acquisition is subject to the completion of a number of conditions and approvals. No sale price was disclosed.
“We’re honored to add a respected builder like Darling Homes to our company,” Taylor Morrison’s CEO Sheryl Palmer said in the announcement. “However, the real winners are Texas home buyers who will benefit from the increased selection of homes going forward.”
Taylor Morrison already builds in Austin and Houston, Texas. The Darling acquisition will take the builder into the Dallas market.
Bill Darling, CEO of Darling Homes, said in the announcement that the two companies will operate as “complementary brands.”
Recently Taylor Morrison filed paperwork with the Securities and Exchange Commission announcing plans to sell $250 million worth of shares of class A stock in an initial public stock offering in 2013 that would trade under the name Taylor Morrison Home Corp. The offering would make the company the sixth largest publicly held home builder in the United States, it says in the filing.
Becoming a publicly traded company would give Taylor Morrison access to capital for expansion private home builders such as Darling Homes lacks. Darling was founded in 1987 by three brothers, Bob, Bill, and Steve Darling. The Dallas-based home builder, which also builds in Houston, recently closed its last house in Stonebridge Ranch, the McKinney, Texas, community of more than 2,000 homes that was the catalyst for the brothers to get into the home building business 25 years ago. Darling now builds homes for move-up buyers in 28 communities.
The past two years have been eventful for Taylor Morrison, which also operates Monarch Homes in Canada. In March of 2011 it was carved off from Taylor Wimpey, a British builder that needed cash and wanted to consolidate its operations to the United Kingdom. It was purchased by private equity investors and principals in the company who cobbled together $1.2 billion to buy the company now operated under the name TMM Holdings.
Teresa Burney is a senior editor for Builder magazine.