Merger in the works for Lennar and CalAtlantic
On Monday, Lennar Corp. and CalAtlantic Group Inc. announced a merger agreement. This merger of two large homebuilders will put 240,000 homesites in 49 markets across 21 states all under one company. The $9.3 billion deal will poise the combined company to be one of the nation’s leading homebuilders. The combined company will be in the top 3 builders in 24 out of the top 30 markets in the country with around $17 billion of revenue.
The deal has already been approved by the boards of directors at both companies. They expect shareholder approval and are planning to execute the merger in the first quarter of 2018. Both companies appear eager for the merger, and it bodes well for times to come. The merger likely means that they are predicting strong market profitability for years to come. There is currently a solid homebuilding market with job and wage growth, consumer confidence, low inventory, and a production deficit. These industry markers are unlikely to change quickly. Lennar and CalAtlantic can benefit from the merger as they can streamline purchasing, land acquisition, labor, and overhead.
Per their website, Lennar currently has 21 communities under construction in the Charlotte area. They range from Mooresville, NC to Rock Hill, SC. Most of the communities are single-family homes, but they do have a few multi-family projects as well. The typical Lennar community starts in the $200,000’s and ranges to the $500,000’s. With upgrades and special option packages, prices can go much higher.
Per their website, CalAtlantic is responsible for 41 communities in and around Charlotte. They have 142 quick move-in homes available right now. Most of the homes are single-family, but there are a few townhome projects in the works as well. Starting prices for these homes range from the $200,000’s to the $600,000’s. Depending on upgrades, the price points can go much higher.
Look for this merger to complete in spring of next year. For more information, check out the full article in the Charlotte Business Journal.