Taylor Morrison Home Corporation (NYSE: TMHC) and AV Homes, Inc. (NASDAQ: AVHI), both based in Scottsdale, Arizona, on Thursday announced they have entered into a definitive agreement under which Taylor Morrison will acquire all of the outstanding shares of AV Homes common stock at $21.50 per share in a cash and stock transaction valued at approximately $963 million. The deal includes the assumption of AV Homes outstanding debt.
Shares of AV soared on the news, jumping from $16.50 to $20.80 in pre-market trading Thursday.
Taylor Morrison said the transaction has been unanimously approved by both boards and submitted to AV shareholders for approval. The transaction is expected to close late in the third quarter or early in the fourth quarter of 2018 and the closing is subject to customary closing conditions. TPG Capital, the holder of approximately 40% of AV Homes common stock, has agreed to vote all of its shares of AV Homes common stock in favor of the transaction.
AV Homes shareholders will have the option to receive $21.50 in cash, 0.9793 shares of Taylor Morrison Class A common stock or the combination of $12.64 in cash and 0.4034 shares of Taylor Morrison Class A common stock. On a pro forma basis, AV Homes stockholders are expected to own up to approximately 10% of the combined company.

Taylor Morrison CEO and Chairman Sheryl Palmer.
“The joining of Taylor Morrison and AV Homes supports our strategic growth priority by bringing us deeper into five of our current markets, adding Jacksonville to the portfolio, and further expanding our offerings in the affordable first-time buyer and active adult consumer segments,” said Sheryl Palmer, chairman and CEO of Taylor Morrison. “This transaction, subject to customary closing conditions, will serve as a means to further enhance our land pipeline in the right locations, potentially offsetting some future land purchases, while simultaneously delivering land to our home building operations with mature communities. What’s more, we believe the commonalities in product offerings and consumer groups will create opportunities for scale efficiencies and enhance our national footprint while creating top and bottom-line performance improvement.”
Roger A. Cregg, president and CEO of AV Homes, Inc., said, “We are pleased with the significant progress AV Homes has made over the last several years executing our growth strategy, including being recognized as the fastest growing public home builder in both 2015 and 2016. Through our focus on consumer segmentation and geographical diversification, we have grown our position in both existing and new attractive metropolitan areas. By combining with Taylor Morrison, one of the country’s finest home builders, we will create a premier home builder in some of the country’s highest growth areas and drive accretive returns for our shareholders for years to come.”
Citigroup Global Markets, Inc. served as the financial advisor to Taylor Morrison and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as Taylor Morrison’s legal counsel. J.P. Morgan Securities LLC and Moelis & Company LLC served as the financial advisors to AV Homes and Wachtell, Lipton, Rosen & Katz acted as AV Homes’legal counsel.