D.R. Horton has beat out Starwood Capital in the race to acquire Forestar, agreeing to buy 75% of the homebuilder’s shares for $17.75 apiece in cash, representing total consideration of roughly $560 million. Forestar had initially agreed to be acquired by Starwood for $14.25 per share in April, with the private equity firm raising its offer to $16 in recent weeks in an attempt to fend off D.R. Horton’s late charge.
Although its victory was far from a foregone conclusion, the odds may have been in D.R. Horton’s favor. Since the start of 2010, corporate acquirers have completed 359 deals in the US real estate services sector, according to the PitchBook Platform, more than twice as many as their private equity peers. Here’s how the two figures compare on a YoY basis:
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The deal should create significant synergies between D.R. Horton, a homebuilder, and Forestar, a land developer. Homebuilders in the US have struggled to capitalize on the recent recovery in the housing market due in part to rising land-acquisition costs, per Reuters.
Article by PitchBook
