Two of the largest homebuilders have come together! Lennar Homes and CalAtlantic homes announced their merger this week. Both companies are publicly traded and the decision was made between their respective boards of directors. This now creates the nation’s largest homebuilder! Approximately 240,000 homesites and over 1,300 active communities will be managed by the combined company. CalAtlantic had already previously acquired Ryland Homes.
The Triangle has a huge Lennar and CalAtlantic presence, already. With both quality and elaborate home designs, these homebuilders combining means only more great homes for you in the Raleigh-Durham area! CalAtlantic already has well over 20 communities in the Triangle area alone.
Stuart Miller, Chief Executive Officer of Lennar, said, “This combination is first and foremost to enhance shareholder value. The transaction is accretive before deal costs in fiscal year 2018 and significantly accretive in fiscal year 2019. The combined company will have a strong balance sheet and generate significant cash flow available to pay down debt and repurchase shares, which will improve returns on capital and equity.”
Mr. Miller continued, “This combination increases our scale in the markets that we already know and in the products we already offer to entry level, move up and active adult customers. As a result, the combined company will have a top 3 ranking in 24 of the top 30 markets in the country.”
“Accordingly, our overall company size and local critical mass will yield significant benefits through efficiencies in purchasing, access to land, labor and overhead allocation to a greater number of deliveries. The combined land portfolio will position the company for strong profitability for years to come, as we continue to benefit from a solid homebuilding market, supported by job and wage growth, consumer confidence, low levels of inventory, and a production deficit.”
Larry Nicholson, President and Chief Executive Officer of CalAtlantic, said, “Our combination with Lennar underscores the quality and attractiveness of the CalAtlantic brand and people, and the business our talented team has worked hard to build. Lennar is a well-respected name in the homebuilding industry and their team shares a deep commitment to innovation, quality, integrity and a focus on a superior customer experience.”
Rick Beckwitt, President of Lennar, said, “We have great respect for what Scott Stowell, Larry Nicholson and the CalAtlantic team have accomplished, building upon the rich legacies of Standard Pacific and Ryland. Our discussions over the last several months have only reinforced our conviction that by joining forces, we will achieve new heights in our industry and create significant value for all of our shareholders. We share common cultures and deep traditions of delivering quality and value, doing the right thing and exceeding the expectations of our customers. We look forward to executing our strategy as a larger and even stronger company and welcoming a very talented group of CalAtlantic associates to the Lennar family.”
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