US homebuilders Ryland Group, Standard Pacific announce equal merger
15 June 2015
Ryland Group Inc and Standard Pacific Corp 5th and 12th-largest homebuilders in the US, yesterday said that they would merge to become the 4th-largest homebuilder in the US.
The merged company would own or control about 74,000 homesites and have a market capitalisation of about $5.2 billion and an enterprise value of about $8.2 billion, the companies said in a statement.
In the 12 months ended 31 March 2015, the combined company delivered more than 12,600 homes with combined revenues of $5.1 billion.
Standard Pacific will implement a 1 for 5 reverse stock split, so that each 5 shares of Standard Pacific common stock will be combined into 1 share of Standard Pacific common stock.
After giving effect to the reverse stock split, Ryland shareholders will receive 1.0191 shares of Standard Pacific common stock for each share of Ryland common stock, and fractional shares will be paid out in cash.
Upon closing, Standard Pacific stockholders will own approximately 59 per cent of the combined company, while Ryland shareholders will own approximately 41per cent.
Standard Pacific president and CEO, Scott Stowell said, "With this merger we gain both geographic and product diversification, expanding our reach and enhancing our growth prospects in the entry level, move-up and luxury market segments. Together, we will build homes in 20 of the top 25 MSAs in the United States and will enjoy top 5 market share in 15 of these MSAs."
Ryland president and CEO, Larry Nicholson said, "Today our industry reaches a significant milestone as two of its best operators combine forces. With similar cultures and long histories of crafting quality homes and providing superior customer service, we are each proud of where we've been and look to the future confident that we will be better together."
The companies anticipate production, purchasing and other synergies could result in annual cost savings of between $50-$70 million, and a significant portion of the estimated cost savings by late 2016.
Standard Pacific has been building homes and neighborhoods since its founding in Southern California in 1965.
It is currently offering new homes in major metropolitan areas in Arizona, California, Colorado, Florida, North Carolina, South Carolina, and Texas.
Based in Southern California, Ryland is one of the nation's largest homebuilders and a leading mortgage-finance company. Since its founding in 1967, Ryland has built more than 315,000 homes and financed more than 260,000 mortgages.
Ryland currently operates in 17 states across the country.