- Creating the fifth-biggest U.S. homebuilder, Taylor Morrison (NYSE:TMHC) has agreed to buy smaller rival William Lyon Homes (NYSE:WLH).
- The deal values William Lyon at $2.4B in cash ($2.50/share) and stock (0.800 shares of TMHC common stock). That implies a company value for William Lyon Homes of $21.45 per share or $2.4B including assumption of debt, yielding a purchase price multiple of 1x book.
- Based on yesterday's closing price for TMHC, the stock portion is valued at ~$18.95 per share, bringing the total per-share price to $21.45 and representing ~17% premium to WLH's closing price on Tuesday.
- The companies anticipate approximately $80M in annualized synergies from the transaction.
- TMHC -2.9%; WLH +13% premarket