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By Associated Press
September 22, 2016
NEW YORK (AP) — Lennar will spend $643 million to acquire luxury homebuilder WCI Communities Inc., tying up two of the largest home construction companies in Florida as the U.S. real estate market continues to heat up.
Despite the monthly decline reported this week by the Commerce Department, construction activity has accelerated for much this year. Builders are increasingly optimistic about sales growth, a reflection of how steady job gains are leading more Americans to purchase new houses and sign leases for new apartments.
On Tuesday, Lennar reported a 5 percent jump in third-quarter profit and its revenue continues to rise as it delivers more homes.
Deliveries climbed 7 percent to 6,779 homes, while new orders rose 8 percent to 7,018 homes. Lennar also said that there was a 3 percent increase in the average sales price of homes delivered.
The deal, for $23.50 per share, marks a 37 percent premium to WCI's closing price Wednesday. It will be half in cash and half in Lennar stock.
The boards of both companies have approved the deal, which must still get the nod from WCI shareholders.
Lennar Corp is based in Miami. Shares of WCI, based in Bonita Springs, jumped 37 percent and appeared to be heading for a new high for 2016.
Copyright 2016 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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