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More than a decade after it was founded in Newport Beach, Landsea Homes is returning to its local roots—but under new ownership.
The Dallas-based homebuilder, which relocated its headquarters to Texas two years ago, is being acquired by Irvine’s New Home Co. in a $1.2 billion all-cash deal. Under the agreement, New Home will purchase all outstanding shares of Landsea Homes (Nasdaq: LSEA) for $11.30 per share, representing a 61% premium over Landsea’s closing price on May 12.
Landsea Homes and New Home Co. merging into one entity means the expanded company would become a privately held top 25 homebuilder across 10 markets, including major metropolitan areas in Arizona, California, Colorado, Florida, Oregon, Texas and Washington state.
“We believe this transaction with New Home will deliver immediate cash value to our stockholders at a significant premium and provide us with a strong, well-capitalized partner to accelerate our next phase of growth,” John Ho, chief executive of Landsea Homes, said in a statement.
The sale ends a remarkable run for Ho, who in his 30s in 2013 started the company as the U.S. division of China-based homebuilder Landsea Group. He grew the company from $29 million in 2017 to over $1.5 billion last year, emphasizing entry level and first-time move-up homes.
Its net new home orders rose 35% to 2,634 in 2024, a notable achievement given the rise in interest rates has stalled many other homebuilders. As of Dec. 31, the company owned or controlled 10,944 lots, which is about three to four years of supply.
Ho’s future role at the combined company has not yet been disclosed. Ho, who received about $9 million in compensation in 2022 and 2023, owned 508,661 shares, according to the 2024 proxy; if he still has that amount, his shares are worth $5.7 million at the close of this deal.
The founder of Landsea Group is Ming “Martini” Tian, who is currently chairman of the Landsea homebuilder and who owned 17 million shares as of the latest proxy. If he still owns that amount of shares, they’re worth about $192 million.
Matthew Zaist, president and CEO of New Home Co., will lead the combined organization.
“Our acquisition of Landsea Homes is an important next step in New Home’s long-term growth strategy,” Zaist said in a statement. “By bringing together two highly complementary businesses and teams with shared customer-first values, we will further scale our platform nationally and help even more buyers realize the dream of homeownership.”
Zaist has a lengthy history in homebuilding as CEO of William Lyon Homes.
Coming Back Home
Landsea has an enterprise value of $1.2 billion, according to the two companies. As of March 31, Landsea had $256.3 million in cash and equivalents as well as $727.5 million in total debt. At press time, Landsea’s market cap was $409 million and $11.26 a share, indicating investors believe the deal will be completed.
New Home Co. designs, builds and sells attached and detached single-family houses, specializing in entry level and first-time buyers in the Central, Pacific Northwest and West regions. Larry Webb, a well-known home builder in Orange County, began New Home Co. in 2009 in Irvine before it moved its headquarters to Scottsdale, Arizona. In 2021, it was purchased for about $338 million by affiliates of Apollo Global Management, which has $785 billion in assets under management (NYSE: APO.) After the acquisition, New Home moved its headquarters back to Irvine.
Apollo Funds, an asset manager with $785 billion of assets under management, has been a majority shareholder of New Home Co. since 2021.
The deal reconnects Landsea to its Orange County roots—where it operated in Newport Beach for 10 years before relocating to Dallas in March 2023.
Shares of Landsea were up more than 60% to a little more than $11 apiece at the end of trading on May 13, the first day of trading after news of the pending transaction was announced.
New Home Co. announced late last year it was expanding its presence in Colorado, with plans to build more than 1,000 new houses in the Denver market. The expansion into Denver could yield New Home Co. an estimated homebuilding revenue of $750 million, according to the company.
The Irvine-based homebuilder also invested $17 million in an Austin, Texas, suburb last November, where New Home Co. began construction on 105 homesites.
Landsea recently bought a retail property in Huntington Beach and plans to convert the commercial land into 129 townhomes.
The headquarters of the combined company will remain in Irvine but will also maintain a presence in Dallas at Landsea’s existing North Texas offices.
New Home Co. already has a presence in Texas, with offices in Houston and Austin.
The Business Journal recognized Landsea’s Chief Legal Officer Franco Tenerelli at the General Counsel Awards event in 2022, when the homebuilder was still based in Newport Beach.
Specific plans of what New Home Co. and Landsea would do as a combined company have not yet been revealed, as the transaction won’t be complete until the third quarter.
Landsea Homes’ Board of Directors unanimously voted in favor of the transaction.
Funding for the transaction will be provided by Millrose Properties, with J.P. Morgan Securities LLC, RBC Capital Markets, Vestra Advisors and Wells Fargo serving as financial advisors to New Home. Paul, Weiss, Rifkind, Wharton & Garrison LLP was legal counsel to New Home. Moelis & Co. LLC was the financial advisor and Latham & Watkins LLP acted as legal counsel to Landsea Homes.