Lennar In Deal To Buy CalAtlantic For $9.3 Bln - Quick Facts

(RTTNews) - Homebuilder Lennar Corp. (LEN, LEN.B) Monday announced a definitive merger agreement to acquire CalAtlantic Group, Inc. (CAA) in a transaction valued at approximately $9.3 billion, including $3.6 billion of net debt assumed.

Under the deal, each share of CalAtlantic stock will be exchanged for 0.885 shares of Lennar Class A common stock.

Based on the closing price of Lennar's Class A common stock on the NYSE on October 27, the implied value of the stock consideration is $51.34 per share, representing a 27% premium to CalAtlantic's closing price that same day.

CalAtlantic's stockholders will also have the option to elect to exchange all or a portion of their shares for cash in the amount of $48.26 per share, subject to a maximum cash amount of approximately $1.2 billion.

On a pro forma basis, CalAtlantic stockholders are expected to own approximately 26% of the combined company.

The transaction is expected to close in the first calendar quarter of 2018.

It is currently anticipated that the transaction will generate annual cost savings and synergies of approximately $250 million, with approximately $75 million achieved in fiscal year 2018.

The business combination is expected to create the nation's largest homebuilder with the last twelve 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. Stuart Miller and the Miller Family Trusts have agreed to vote their 41.4% voting interest in Lennar in favor of the merger.

CalAtlantic shares were gaining around 9 percent in pre-market activity to $44.