Taylor Morrison closes on $2.4 billion merger with William Lyons

Scottsdale-based Taylor Morrison Home Corporation, a national homebuilder and developer, today announced the closing of its acquisition of William Lyon Homes. William Lyon’s complementary land and community portfolio, combined with entry into three top housing markets, marks a significant new chapter in Taylor Morrison’s growth strategy.

• Creates the nation’s fifth-largest homebuilder based on last 12 months (LTM) closings

• Top 5 position in 16 of the combined 22 markets

• Entry into Washington, Oregon and Nevada markets

• Significantly increases entry-level market penetrations

• Anticipate approximately $80 million in annualized synergies

• Total consideration for acquisition will be approximately $2.5 billion, which includes $950 million of equity

Taylor Morrison acquired all of the outstanding shares of William Lyon Homes common stock for per share consideration of (1) $2.50 in cash and (2) 0.800 shares of Taylor Morrison common stock, which ultimately yields an attractive book value multiple of 1.1. The combined company will have a portfolio of approximately 80,000 owned and controlled lots and about 430 active selling communities at time of close.

“With the exit of our equity sponsors in early 2018, we outlined our strategic priorities as a fully floated company—first of them being smart and meaningful growth along with diversification across price points and consumer segments in the top U.S. housing markets,” said Sheryl Palmer, Taylor Morrison chairman and CEO. “With more than one-year under our belt since the AV Homes acquisition, this is the next transformative step in that journey. But make no mistake, this isn’t just about being bigger. Taylor Morrison, combined with the rich legacy, reputation, solid land positions and experience the William Lyon team members bring to the equation, make us a stronger, better organization for the long-term.”

The deal expands local scale and expertise within six of Taylor Morrison’s major markets, while expanding the company into Washington, Oregon and Nevada. The strategic combination creates the nation’s fifth-largest homebuilder based on LTM of closings, and firmly places Taylor Morrison in a Top 5 position in 16 of the combined 22 markets with more than 14,000 closings estimated in 2020. With greater access to scale efficiencies and a continued drive for operational excellence, the company anticipates top- and bottom-line performance improvement, in addition to synergies from overheads, increased mortgage capture rates and rebate opportunities.

The acquisition of William Lyon Homes increases Taylor Morrison’s workforce to more than 3,000 team members companywide. To welcome all William Lyon Homes’ team members to the Taylor Morrison family, a welcome video featuring interviews with leaders and team members from across the country was shared internally. The company’s comprehensive integration plan is aimed at delivering a seamless team member onboarding experience while quickly capturing savings and operational efficiencies.

“You could say growth is woven into our history,” added Palmer. “Every step our organization has taken the past few years has prepared us for this day—a transformational acquisition representing the culmination of a multi-year strategy to build a large-scale, best-in-class organization focused on maximizing shareholder value at every turn and creating a great place to work for our team members while delivering an unparalleled customer experience.”

Throughout the integration process, the business will continue to focus on leveraging strategic growth to enhance the customer experience, including expanded affordability in core locations and a more personalized technology-enhanced homebuying journey.

Citigroup Global Markets, Inc. served as the financial advisor to Taylor Morrison and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as Taylor Morrison’s legal counsel. JP Morgan Securities LLC served as the financial advisor to William Lyon Homes and Latham & Watkins LLP acted as William Lyon Homes’ legal counsel.