The two Scottsdale, Arizona-based companies announced the plans this week after each respective board unanimously approved Taylor Morrison's $21.50-per-share purchase price. Now the deal goes to AV Homes' shareholders for approval, and is expected to close in the late third quarter or early fourth quarter this year.
Lee Steinhauer, government affairs director for the Greater Orlando Builders Association, said the industry could expect to see even more mergers and acquisitions as builders try to keep pace following the Lennar-Cal Atlantic merger announced last November.
“Taylor Morrison and AV Homes are each individually great homebuilders with strong presences in the Central Florida housing market," he told GrowthSpotter. "Together, they will undoubtedly become an even stronger force in the market.”
Both builders are active in the Orlando market, but in different sectors and with very little geographic overlap.
Taylor Morrison currently has 17 active communities in the market focused largely in Orange and Seminole counties. That includes single-family and attached product in Lake Nona's Laureate Park, at Hamlin Town Center and Hawk's Crest.
AV Homes also has 17 communities mostly in Osceola and Polk counties. AV was the primary developer of the Poinciana community and is selling its final phase of Solivita, a 4,300-acre retirement community with its own town center, country club, two golf courses and 14 pools.
Last year, Division President Ken Thirtyacre brought in a new director of architecture to update AV's entire product line with a focus on more contemporary styles and open living. The company also launched Virtual Realty home tour systems at several sales centers.
Sheryl Palmer, chairman and CEO of Taylor Morrison, said the acquisition allows the builder to gain a foothold in the Jacksonville market and to expand the company's product offerings in the first-time buyer and active adult segments.
AV President and CEO Roger Clegg added, "By combining with Taylor Morrison, one of the country's finest homebuilders, we will create a premier homebuilder in some of the country's highest growth areas and drive accretive returns for our shareholders for years to come."
Earlier this year, Lennar acquired CalAtlantic Homes, making it the largest production builder in the nation. Those companies had nearly 100 combined projects in the Central Florida region, so they elected to maintain two offices and keep the CalAtlantic staff largely intact.