UPDATE, 11/5/13, 11:55 a.m. EST: Sidley Austin is advising Starwood Capital Group, which owns a 38 percent stake in Tri Pointe, with respect to this transaction. The firm’s team includes M&A partners Michael Gordon and Gabriel Saltarelli as well as associate Andrew Erdman.
Tri Pointe Homes said Monday that it has agreed to buy Weyerhaeuser Company’s homebuilding and real estate subsidiary in a cash and stock deal worth $2.7 billion.
Tri Pointe, which is run by real estate investment firm Starwood Capital Group, designs and builds single-family homes in planned communities in California and Colorado. The Irvine, Calif.–based company says that adding the Weyerhauser unit will make it one of the country’s top 10 home builders. “Today’s announcement is an important milestone for our organization as it transforms Tri Pointe into one of the leading players in the homebuilding industry,” Tri Pointe CEO Doug Bauer said in a statement.
The unit changing changes includes five distinct homebuilding brands—Maracay Homes, Pardee Homes, Quadrant Homes, Trendmaker Homes and Winchester Homes—that control a total of about 27,000 housing lots spread across a variety of markets. Tri Pointe says that in addition to increasing its property holdings, the acquisition will expand its geographic presence into Arizona, California, Nevada, Texas, Washington, D.C., and Washington state.
Under the transaction’s terms, Federal Way, Wash.–based Weyerhaeuser will spin or split off the unit in question to its own shareholders in a tax-free process known as a reverse Morris trust. Tri Pointe will then purchase the resulting company by paying shareholders 130 million Tri Pointe shares worth roughly $2 billion, and the Weyerhaeuser unit will make a $700 million payment to its parent company. The deal is expected to close in the second quarter of 2014, pending the approval of regulators and Tri Pointe shareholders.
Tri Pointe has turned to a team of Gibson, Dunn & Crutcher attorneys led by Orange County corporate partner Michael Flynn for legal advice on the acquisition. Tax partner Scott Knutson, compensation and benefits partner Sean Feller, finance partner Cromwell Montgomery, securities regulation and corporate governance practice group cochair James Moloney, securities litigation practice group cochair Meryl Young and securities litigation partner Robert Palmer are also advising on the matter. The Gibson Dunn associates working on the deal are Allison Balick, Melissa Leigh Barshop, Brad Blank, Jason Dreibelbis, Jeffrey Harrison, Phil Kenny and Rick Zakhar.
Gibson Dunn worked with Tri Pointe earlier this year in connection with the company’s initial public offering, with the firm representing a group of underwriters that included Citigroup, Deutsche Bank Securities, FBR and Moelis & Company. (Sidley Austin advised Tri Pointe on the IPO, which raised $233 million in January.)
According to Gibson Dunn, Tri Pointe is also receiving legal advice on the Weyerhaeuser deal from its regular outside counsel at Allen Matkins Leck Gamble Mallory & Natsis. The Allen Matkins team is led by Orange County–based partners Keith Bishop and Drew Emmel. Young Conaway Stargatt & Taylor corporate partner Rolin Bissell is serving as Delaware counsel to Tri Pointe.
