Just eight years after filing for for Chapter 11 bankruptcy, luxury homebuilder and developer WCI Communities has been purchased by Miami-based Lennar Corp. in a $643 million deal. WCI’s board of directors approved Lennar’s offer of $23.50 in cash and stock, split 50-50, for each WCI share. The transaction is based on an enterprise value of $809 million and represents a 37% premium to WCI’s Wednesday closing price of $17.6. WCI filed for bankruptcy in 2008, when its debt was more than half of its capital and shed $2 billion in debt and emerged from bankruptcy in 2010. By June 2013, the firm rebounded and raised $91 million thru an IPO.
The deal will help Lennar boost its lot count in Florida by about 14,200 sites most of which are located on the Florida coasts. WCI delivered 1,118 homes with an average sales price of $444,000 in the 12 months ended June 30. WCI stated they have a 35 day window in the contract to shop for a higher offer. Lennar has an option to increase the cash portion of its offer, including paying the full amount in cash. Pending those 35 days, WCI shareholders are expected to vote on the deal in December or January.
Lennar, the second-largest U.S. homebuilder, had $9.74 billion in revenues in 2015. “WCI’s land portfolio dovetails perfectly with our own Florida footprint and expands our product offering to capture more of the move-up market,” said Lennar CEO Stuart Miller. “Our combined presence in the premier coastal Florida markets will drive growth and allow significant cross and dual brand marketing opportunities.”
