William Lyon Homes agreed to acquire homebuilder RSI Communities LLC along with three related real estate assets for roughly $460 million.
RSI is focused on the Southern California and Texas markets, and the deal marks William Lyon's entry into Texas.
RSI owned or controlled 11,128 lots as at Dec. 31, 2017. The company's Texas operations will become a new William Lyons region following the transaction and will be led by RSI COO John Bohnen, who will serve as regional president.
The transaction is expected to be complete in March, subject to customary closing conditions and regulatory approvals.
William Lyon plans to fund the acquisition with cash on hand, debt and roughly $200 million in land banking proceeds to be provided by Hearthstone.
J.P. Morgan Securities LLC served as the exclusive financial adviser for William Lyon with Latham & Watkins LLP acting as legal adviser.
Citi served as the exclusive financial adviser for RSI with O'Melveny & Myers LLP acting as legal adviser.