MIAMI _ Lennar Corp., the No. 2 U.S. homebuilder, agreed to buy luxury homebuilding WCI Communities in a deal that would expand Miami-based Lennar's reach and operations in the state.
Lennar will spend $643 million to acquire Bonita Springs-based WCI, a transaction that combines two of the largest home construction companies in Florida. The boards of both publicly traded companies have approved the deal, which must still get the nod from WCI shareholders.
News of the deal sent WCI shares soaring nearly 38 percent to a close of $23.67, while Lennar shares gained 0.4 percent to close at $43.60.
Lennar offered $23.50 in cash and stock for each WCI share, or about 37 percent more than WCI's closing share price on Wednesday. The transaction is based on an enterprise value of $809 million, according to a statement.
"WCI's land portfolio dovetails perfectly with our own Florida footprint and expands our product offering to capture more of the move-up market," Lennar CEO Stuart Miller said in a statement. "Our combined presence in the premier coastal Florida markets will drive growth and allow significant cross and dual brand-marketing opportunities."
As part of the agreement, WCI can shop around for a better offer for 35 days. If no better offer is found, then WCI shareholders will vote on the proposal in December or January. Lennar said it would expect the deal to be completed shortly thereafter.
"Our agreement with Lennar testifies to the legacy and quality of our brand, the attractiveness of our homes and communities, and the talent of our team members," said Keith Bass, president and CEO of WCI Communities, in a statement. "WCI Communities homebuyers and homeowners can expect a smooth transition and the continuation of the top-tier service they have come to expect from WCI."
Lennar, founded in 1954, builds affordable, move-up and retirement homes. In its most recent quarterly earnings report, released on Tuesday, the homebuilder posted gains in key metrics, coming in above analysts' expectations. Lennar reported a quarterly profit of $235.8 million, or $1.01 a share, up from $223.3 million, or 96 cents a share, a year prior. Revenue grew 13.7 percent to $2.83 billion.
