LF Capital Acquisition Corp. has entered into a definitive merger agreement with Newport Beach, Calif.–based builder Landsea Homes in a transaction valued at $510 million. With unanimous approval by both companies’ board of directors, the proposed transaction is expected to close in the fourth quarter of 2020.
Post-closing, Landsea Homes plans to expand its business both within its core markets of California and Arizona and grow organically to potential new, high-growth markets. Once the transaction is complete, the combined company will be named Landsea Homes Corp.
“Landsea Homes has established a unique and differentiated home building platform with significant growth prospects for the future,” says Scott Reed, CEO and president of LF Capital. “With a strong foothold in two high-growth real estate markets, California and Arizona, and an industry-leading program that provides a superior living environment through home automation, sustainability, and energy savings, we believe this transaction will allow Landsea to reach its true growth potential.”
Landsea Homes was founded in 2013 by Landsea Green Properties Co. (LGP), a publicly traded company listed on the Hong Kong Stock Exchange, to build homes exclusively for the U.S. domestic market. LGP will not receive any cash proceeds in the merger and is expected to own 67.4% of Landsea Homes at closing, according to the release.
For the 12 months ended June 30, 2020, Landsea Homes had net orders of 1,302 homes, 932 deliveries, 856 homes in backlog, and generated $641 million in total revenue. Tangible book value as of June 30, 2020, was $484 million.
“Merging with LF Capital and becoming a public company is the right next step in our growth phase and an important milestone for our company,” says John Ho, CEO of Landsea Homes. “This transaction will enhance our ability to grow our market share, diversify across product offerings, strengthen our brand position, and maintain an appropriate supply of land for future buildout.”
In addition to the merger, Landsea Homes also announced another strategic expansion last week by acquiring 476 finished single-family homes at Sunrise Ranch in Surprise, Ariz. The 130-acre community consists of three different new home product offerings and multiple lot sizes anchored by a network of community amenities. Sales for the neighborhood are expected to begin in mid-2021.
