Miami-based Lennar Corporation and CalAtlantic Group, today announced a definitive merger agreement creating the largest homebuilder in the United States, in a transaction valued at $9.3 billion, including $3.6 billion of net debt.
The deal is comprised of 80 percent stock and 20 percent cash. Each share of CalAtlantic stock will be exchanged for 0.885 shares of Lennar Class A common stock which was priced at $51.34 per share on the New York Stock Exchange on Oct. 27.
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The deal translates to a 27 percent premium on CalAtlantic’s closing price that same day. CalAtlantic stockholders will own approximately 26 percent of the combined company.
The business side creates America’s largest homebuilder with the last 12 months of revenues in excess of $17 billion and equity market capitalization, based on current market prices, of $18 billion.
The transaction will generate annual cost savings and synergies of approximately $250 million, with $75 million achieved in fiscal year 2018.
Founded 63 years ago, in 1954. the name Lennar is a portmanteau of the first names of 2 of the founders of the company, Leonard Miller and Arnold Rosen. In 1997, Stuart Miller, the son of co-founder Leonard Miller, took over the company. Leonard Miller died in 2002.
The company also owns Rialto Capital Management, the sponsor of 6 private equity funds that invest in real estate and an originator commercial mortgage loans for securitization.