US buyout house Apollo has agreed to take New York-listed homebuilder The New Home Company private in a $388m all-cash transaction. The firm said it expects an “exciting opportunity” as accelerated housing demand is met with limited supply.
The deal sees Apollo buying all outstanding shares of the company at $9 apiece, representing an 85% premium to the 90-day volume-weighted average price. About 30% of New Home Company’s common stock holders have agreed to tender their shares to Apollo.
Founded in 2009, the New Home Company provides design, construction and home sale services in California, Arizona and Colorado. The firm said it will support the company in the consolidation of the market through greater operational and financial flexibility.
Peter Sinensky, partner at Apollo, said, “As consumer demand for new homes accelerates amid limited supply, we continue to see exciting opportunities to invest in the residential housing market.
“New Home’s consumer-driven approach and dedicated focus on integrating unique design and architecture has separated the Company as a best-in-class homebuilder. We are excited to work with the management team to execute on the Company’s growth strategy and provide more homes to consumers across the country.”
Apollo was reportedly in talks to join a consortium led by Fortress Investment Group that last month agreed a £9.5m takeover of UK supermarket chain Morrisons.
The firm raised more than $2.3bn for the final close of its latest Accord fund targeting dislocated credit deals in February, less than a year after it collected about $1.75bn for Accord Fund III in a matter of weeks, driven by LP desire to profit from the widespread market volatility caused by the Covid crisis.
Its flagship fund IX was closed in 2017 with $24.7bn of commitments.
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