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Taylor Morrison to acquire AV Homes in $963M deal

Taylor Morrison Home Corp. signed a cash and stock deal worth roughly $963 million to acquire all of the outstanding shares of AV Homes Inc.'s common stock for $21.50 apiece.

The roughly $490 million acquisition price reflects a purchase multiple of 1.1x book, according to a release. The deal is expected to generate $30 million in annualized synergies.

AV Homes' stockholders may choose to receive a consideration per share of $21.50 in cash, 0.9793 share of Taylor's class A common stock, or a combination of $12.64 in cash and 0.4034 share of Taylor's class A common stock, subject to an overall proration of roughly 60% cash and 40% stock.

The boards of the two Arizona-based homebuilders have unanimously approved the transaction, which includes the purchase of AV Homes' outstanding debt. TPG Capital, which holds approximately 40% of AV Homes' common stock, also voted in favor of the acquisition. The deal requires approval from AV Homes' stockholders.

The acquisition is slated for completion, subject to customary closing conditions, in the third or fourth quarter. It will enhance Taylor's presence in the more affordable, first-time buyer segment, while also adding Jacksonville, Fla., to its portfolio.

Citigroup Global Markets Inc. acted as Taylor's financial adviser, while Paul Weiss Rifkind Wharton & Garrison LLP was its legal counsel. For AV Homes, J.P. Morgan Securities LLC and Moelis & Co. LLC acted as financial adviser, while Wachtell Lipton Rosen & Katz served as legal counsel.