Berkshire Buys Top Home Builder
Berkshire Hathaway has closed its $8.5 billion acquisition of Taylor Morrison, a “best-in-class” national homebuilder, according to the company’s announcement. This deal brings Taylor Morrison under Berkshire’s umbrella, helping the conglomerate realize its “vision for a unified site-built homebuilding operation.”
Acquisition Details
The acquisition was announced less than two months ago, and the deal has now been finalized. Berkshire Hathaway CEO Greg Abel said, “Today marks an important step forward.” He added that Taylor Morrison will “lead our vision for a unified site-built homebuilding operation” and help more Americans achieve their dream of homeownership.
The terms of the deal include Berkshire acquiring Taylor Morrison for $72.50 per share in cash. Taylor Morrison’s equity value was estimated to be $6.8 billion, with a total enterprise value of about $8.5 billion.
Integration and Expansion
Taylor Morrison’s businesses, including Esplanade, Yardly, and Taylor Morrison Home Funding, will be integrated into Berkshire Hathaway’s existing operations. CEO Sheryl Palmer will continue to lead Taylor Morrison, and the company’s presence will expand from 12 states to 21 states and 52 housing markets, combined with Berkshire’s Clayton Properties Group.
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Palmer acknowledged the company’s “truly historic day” and “exciting new era” in a post on LinkedIn. “What excites me most is what comes next,” Palmer wrote. “The scale and reach we gain by unifying with Berkshire and Clayton’s 15 site-built homebuilders is transformative.”
Berkshire said its home building segment will now serve renters, first-time buyers, and consumers looking to move up, buy a second home or invest in a resort-style property. Palmer said in a July 24 interview that the company will maintain its “very specialized, local expertise” while expanding its reach.
Long-term Focus
Despite the housing market being stalled for the past four years, Palmer expressed optimism about the future. She said that the company’s long-term focus and ability to “acquire land in today’s market at very disciplined prices and invest through these more unique times” provide “a unique opportunity.”
“We get to focus on the long game because, as you know, this is a cyclical business that we operate in,” she told CNBC.
