Taylor Morrison Home has filed paperwork with the Securities and Exchange Commission announcing plans to sell $250 million 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.
The past two years have been eventful for the Scottsdale, Ariz.–based builder. 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 of TMM Holdings. Since then there have been several financial maneuvers to reconfigure the company’s debt through various borrowings and refinancings.
The stock offering, timed as the home building market has significantly improved, is the most recent financial tool to shift some of the debt off the initial investors and onto the public market. It also grants the builder something it doesn’t have as a privately owned builder: access to the larger pool of public investors and capital that helped the large publicly held home builders remain solvent and well-funded throughout the downturn.
The principal investors, affiliates of TPG Capital, Oaktree Capital Management LP, and JH Investments, will own a majority of the combined voting power of the common stock after the transition to a publicly held company, according to the prospectus filed with the SEC. The investors, including some of the company’s management, will remain in control, the documents said. (An investment group led by Oaktree Capital Management LP owns Hanley Wood, Builder's publisher.)
Taylor Morrison has been profitable in 2010 and 2011, and this year sales numbers climbed as the market began to noticeably emerge from the recession. It closed 2,586 homes (1,880 in the United States and 706 in Canada) in the first nine months of the year. At the end of September its orders for new homes had grown 47% compared with 2011 and it was averaging three sales a month in each of its actively selling community, nearly double the 1.7 it averaged in 2011.
Even before breaking off from the company’s British roots, Taylor Morrison was busy buying land throughout the downturn at bottom prices. Since January of 2009, it spent about $915 million on land, acquiring 17,295 lots, of which 12,534 remain in its supply.
Beyond the filing, Taylor Morrison said it could not comment.
Teresa Burney is a senior editor for Builder magazine.
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