Orange County icon William Lyon Home sold to rival Arizona in $ 2.4B deal – Orange County Register
William Lyon Homes, one of Orange County's oldest independent home builders, merges with Arizona's Taylor Morrison.
The agreement, announced on Wednesday, November 6, will create the nation's fifth largest housing developer, based on 2018 closures.  Here are some answers to your questions …
Lyon … the name rings a bell, no? Lyon Homes was founded in 1954 in Newport Beach by Orange County luminary and war hero General William Lyon, who still serves as mayor emeritus. His son William H. Lyon serves as chairman of Lyon Homes.
The company has long been a leading local builder, but like many in the industry, it suffered after the housing bubble burst a decade ago. The company applied for bankruptcy protection in 2011, and a quick rescue plan quickly got it out of bankruptcy. The rebuilt builder went public in 2013.
And the price for this deal? At current stock values plus debt, there is a $ 2.4 billion deal. Lyon shareholders will receive $ 2.50 in cash per share and 0.80 shares of Taylor Morrison stock. The $ 21.45 per share offer represents a 16.7% premium to William Lyon on Tuesday.
How is Lyon's economy? After a record 2018 – $ 2.1 billion in revenue and 4,186 housing sales – Lyon slipped slightly this year. Through 2019 & # 39; s first quarters, housing will increase by just 4%; revenues fell 3% as the selling price weakened; profits were halved.
And the premium benefit: 29,000 home parties to build on.
Why did Lyon sell? In recent months, officials in Lyon have stated that they were not satisfied with the Wall Street valuation. Hints that these words meant a sale and an improved real estate market – plus this deal – have essentially doubled Lyon's share this year to Wednesday's $ 20.36 close.
So what's the plan? Taylor Morrison shareholders would own about 77% of the total company. The combined company's estimated home build muscle will include $ 6.7 billion in annual revenue, 14,200 homes sold with 83,000 owned plots. And what's a merger without cost savings: Taylor Morrison estimates $ 80 million dollars in annual synergies.
Buyer's comment? "The agreement to acquire William Lyon Homes marks a historic day for Taylor Morrison as we continue to grow our business in smart and meaningful ways," said Taylor Morrison CEO Sheryl Palmer. "The combined business provides the unique opportunity to gain local scale and expertise within six months of our major markets, while expanding Taylor Morrison to Washington, Oregon and Nevada."
Seller's comment? "The decision to partner with Taylor Morrison was based on shared strategic alignment, like-minded core values and a long history of integrity," Matthew Zaist, President and CEO of William Lyon. "We are confident of the success Taylor Morrison demonstrates through his reputation for leadership, quality construction and unparalleled customer experience, and knowing our teams, our customers and our shareholders will be in good hands. "
Next step? The agreement requires the approval of both company shareholders. 42% of the voting power said they would vote to accept the offer. If everything goes as planned, the deal could be terminated "in the first quarter or early in the second quarter of 2020."
Reuters contributed to this report.