Lennar Corp., America’s second largest homebuilder, is acquiring WCI Communities inc. which makes luxury homes, for $643 million. The merger will forme Lennar subsidiary, and the largest homebuilders in Florida, the company announced on Thursday.
WCI’s stockholders should approve the vote in December or January. Both of the company’s boards already approved the deal.
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The transaction gives WCI an enterprise value of $809 million, Lennar said.
Lennar will pay $23.50 per WCI share, which marks a 37 percent premium over WCI’s closing stock price on Wednesday.
“WCI’s land portfolio dovetails perfectly with our own Florida footprint and expands our product offering to capture more of the move-up market, ” Lennar Chief Executive Stuart Miller said.
The agreement includes provision that will allow WCI 35 days to shop for a higher offer to maximize value for WCI stockholders, WCI said. Lennar said it had the option of increasing the cash portion of the offer, including paying the full amount in cash.
WCI said that for the last fiscal year ending on June 30, the company completed 1, 118 homes with an average price of $444, 000, and has a portfolio of 14, 200 home sites located in Florida’s top coastal markets.
Home prices have continued to rise following the 2007 housing crisis nationwide and in Florida.
Lennar was ranked the second biggest homebuilder in the country according to the 2016 Builder 100 list. D.R. Horton came in at No. 1. WCI was No. 49, according to the list.
