Taylor Morrison buys rival William Lyon Homes to expand in western U.S.

Nov. 6 (UPI) -- Home builder Taylor Morrison announced Wednesday it will buy competitor William Lyon Homes for $2.4 billion -- in a bid to expand its footprint in the Pacific Northwest, Colorado and Texas.

The combined company will be the nation's fifth-largest home builder, based on 2018 closings.

Taylor Morrison will acquire all outstanding shares of William Lyon Homes at $2.50 in cash and 0.80 shares of Taylor Morrison common stock. It's a 90 percent stock and 10 percent cash transaction. It's Taylor Morrison's sixth acquisition in seven years.

"The agreement to acquire William Lyon Homes marks a historic day for Taylor Morrison as we continue to grow our business in smart and meaningful ways," Taylor Morrison Chair and CEO Sheryl Palmer said. "The combined business provides the unique opportunity to gain local scale and expertise within six months of our major markets, while expanding Taylor Morrison into Washington, Oregon and Nevada."

Palmer said she expects the deal to produce $80 million in annualized synergies, and bring reduced overhead.

William Lyon was founded in 1954 in Newport Beach, Calif., and saw record earnings last year with $2.1 billion in revenue and 4,000 home sales.

The combined company is expected to generate $6.7 billion in revenue, 14,200 closings and 83,000 lots owned.