Taylor Morrison Home Corporation (NYSE: TMHC) on Thursday announced the closing of its acquisition of William Lyon Homes (NYSE: WLH).
Details of the deal include:
- Creates the nation's fifth largest home builder based on last twelve months (LTM) closings
- Top 5 position in 16 of the combined 22 markets
- Entry into Washington, Oregon and Nevada markets
- Significantly increases entry-level market penetrations
- Anticipate approximately $80 million in annualized synergies
- Total consideration for acquisition will be approximately $2.5 billion, which includes $950 million of equity
Taylor Morrison acquired all of the outstanding shares of William Lyon Homes common stock for per share consideration of (1) $2.50 in cash and (2) 0.800 shares of Taylor Morrison common stock, which ultimately yields a book value multiple of 1.1. The combined company will have a portfolio of approximately 80,000 owned and controlled lots and about 430 active selling communities at time of close.
"With the exit of our equity sponsors in early 2018, we outlined our strategic priorities as a fully floated company—first of them being smart and meaningful growth along with diversification across price points and consumer segments in the top U.S. housing markets," said Sheryl Palmer, Taylor Morrison chairman and CEO. "With more than one-year under our belt since the AV Homes acquisition, this is the next transformative step in that journey. But make no mistake, this isn't just about being bigger. Taylor Morrison, combined with the rich legacy, reputation, solid land positions and experience the William Lyon team members bring to the equation, make us a stronger, better organization for the long-term."
The deal expands local scale and expertise within six of Taylor Morrison's major markets, while expanding the company into Washington, Oregon and Nevada. The strategic combination places Taylor Morrison in a Top 5 position in 16 of the combined 22 markets with more than 14,000 closings estimated in 2020. With greater access to scale efficiencies and a continued drive for operational excellence, the company anticipates top- and bottom-line performance improvement, in addition to synergies from overheads, increased mortgage capture rates and rebate opportunities.
The acquisition of William Lyon Homes increases Taylor Morrison's workforce to more than 3,000 team members companywide. To welcome all William Lyon Homes' team members to the Taylor Morrison family, a welcome video featuring interviews with leaders and team members from across the country was shared internally.
