The Mergers + Acquisitions team guided Lennar Corporation (NYSE: LEN and LEN.B) in its definitive merger agreement with CalAtlantic Group, Inc. (NYSE: CAA), in which each share of CalAtlantic stock will be exchanged for 0.885 shares of Lennar Class A common stock in a transaction valued at approximately $9.3 billion, including $3.6 billion of net debt assumed. Based on the closing price of Lennar’s Class A common stock on the NYSE on October 27, 2017, the implied value of the stock consideration is $51.34 per share, representing a 27% premium to CalAtlantic’s closing price that same day.
The business combination will create the nation’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 approximately $18 billion. The combined company will control approximately 240,000 homesites and will have approximately 1,300 active communities in 49 markets across 21 states, where approximately 50% of the U.S. population currently lives. The transaction is subject to approval by Lennar and CalAtlantic stockholders and is expected to close in the first quarter of 2018.
For additional details on the transaction, please read the press release.