Deals

TPG, Oaktree buy North America arm of British homebuilder

The $955m deal sees TPG and Oaktree partner with former Intrawest founder Joe Houssain to acquire the US and Canadian operations of Taylor Wimpey for a 3.4% premium over its net assets.

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TPG Capital and Oaktree Capital Management have joined forces with the former founder of Intrawest, Joe Houssain, to acquire the North America businesses of UK homebuilder Taylor Wimpey.

The trio of private equity and real estate firms were part of an “extensive auction process” that saw them pay $955 million for Taylor Wimpey’s US and Canadian arms, Taylor Woodrow Holdings (USA) and Taylor Wimpey Holdings of Canada. Taylor Wimpey develops homes in the US and Canada under the Taylor Morrison and Monarch Homes brands.

Taylor Wimpey chief executive Pete Redfern said in a statement the sale would allow the UK homebuilder to focus on its core British business. “The sale will provide us with a strengthened balance sheet and increased financial capacity to invest in the UK and to pursue our strategic aims of focusing on margin growth,” he said, adding that the auction had been “competitive”, resulting in “an attractive valuation for this business” and a 3.4 percent premium over the business’ net assets of $923m.

TPG, Oaktree and Houssain’s holding company, JH Investments, were unavailable for comment at press time, which was outside normal US business hours.

The acquisition sees the three firms take over the ninth largest homebuilder in the US by revenue, and gain access to 7.3 years of land supply in the US, primarily in Arizona, California, Florida and Texas, which saw some of the greatest distress and where much of the focus for single-family investments has been. In Canada, Taylor Wimpey has operated primarily in the Greater Toronto Area, Ottawa and Kitchener-Waterloo areas of Ontario.

Taylor Wimpey said the proceeds would be used to pay down its debt and bolster its pension fund. The firm also revealed it had considered a public listing of the US and Canadian operations but an outright sale was agreed following “a competitive auction process has achieved an attractive valuation … [and] which fairly reflects market conditions and its future growth potential as a standalone entity”.