8-K: New Home Co. Completes Acquisition of Landsea Homes Corporation, Delisting from Nasdaq

New Home Co. has successfully completed its acquisition of Landsea Homes Corporation for $11.30 per share in cash, leading to Landsea Homes' delisting from Nasdaq and the formation of a privately-held, top-25 national homebuilder.

Summary

• Landsea Homes Corporation was acquired by Lido Holdco, Inc. (Parent) through its subsidiary Lido Merger Sub, Inc. on June 25, 2025.
• The acquisition was executed via a tender offer at $11.30 per share in cash, followed by a merger, with 30,399,652 shares (approximately 83.27% of outstanding shares) validly tendered.
• All outstanding obligations under Landsea Homes' Amended and Restated Credit Agreement, dated April 19, 2024, were fully repaid and the agreement terminated.
• The Company's 11.0% Senior Notes due 2028 were redeemed and cancelled on June 25, 2025, at 100.000% of principal plus the Make-Whole Amount and accrued interest.
• Approximately 97.95% of the 8.875% Senior Notes due 2029 were repurchased and cancelled through a debt tender offer.
• Company Options, Restricted Stock Unit (RSU) Awards, and Performance Share Unit (PSU) Awards were cancelled and converted into cash payments based on the Merger Consideration.
• Warrants now represent the right to purchase one-tenth of the Merger Consideration, with a temporarily reduced warrant price of $0.908 effective until July 25, 2025, after which unexercised warrants will be cancelled.
• Landsea Homes common stock and warrants have been delisted from Nasdaq, and the Company intends to deregister its securities and suspend reporting obligations.
• Landsea Homes is now operating as a wholly owned subsidiary of Parent (New Home Co.).

Sentiment

Score: 8

Explanation: The successful completion of a major acquisition, including the full repayment and termination of significant debt obligations, and the formation of a larger, more diversified entity, represents a positive strategic outcome for the acquiring entity and a successful exit for Landsea Homes shareholders.

Positives

• The acquisition provides immediate liquidity to Landsea Homes shareholders at the agreed-upon price of $11.30 per share.
• The transaction creates a 'privately-held, top-25 national homebuilder with a strong foundation for growth,' enhancing scale and market diversity for the combined entity.
• Significant debt obligations, including the Existing Credit Agreement and 11.0% Senior Notes due 2028, were fully repaid and terminated/cancelled, improving the financial structure.
• A substantial portion (approximately 97.95%) of the 8.875% Senior Notes due 2029 were repurchased and cancelled.
• The acquisition was funded through a diversified capital structure, including an equity contribution from Apollo-managed funds, $522 million in land banking capital from Millrose Properties, and a senior notes offering by New Home.

Negatives

• Landsea Homes common stock and warrants have been delisted from Nasdaq, removing public trading access for former investors.
• Existing Landsea Homes shareholders no longer hold an equity stake in the company, receiving only cash for their shares.
• Unexercised warrants will be cancelled after July 25, 2025, if not exercised at the temporarily reduced price, potentially resulting in a loss for warrant holders.

Risks

• Potential litigation and/or regulatory action relating to the acquisition.
• The anticipated benefits of the acquisition may not be fully realized or may take longer to realize than expected.
• The acquisition could negatively affect business relationships with employees, customers, or suppliers, as well as operating results and business generally.
• There is a risk of unexpected costs, charges, or expenses resulting from the acquisition.
• The combined entity is subject to the impact of legislative, regulatory, economic, competitive, and technological changes.
• Unknown liabilities and uncertainties regarding general economic, business, competitive, legal, regulatory, tax, and geopolitical conditions pose ongoing risks.

Future Outlook

The combined company, now led by Matthew Zaist, is positioned for long-term growth, aiming for greater scale, market diversity, and enhanced offerings for homebuyers. It intends to further extend its platform.

Management Comments

• Matthew Zaist, President and Chief Executive Officer of New Home, stated: "We are pleased to complete this transaction, which marks an important next step in New Home's long-term growth strategy. With greater scale, market diversity and a shared focus on delivering exceptional customer experiences, we are well positioned to further extend our platform and enhance our offerings to homebuyers. We look forward to all that we will accomplish together."

Industry Context

The acquisition of Landsea Homes by New Home Co. signifies a notable consolidation within the U.S. homebuilding industry, creating a privately-held entity that is now positioned as a 'top-25 national homebuilder.' This strategic move aims to leverage increased scale and market diversity, particularly in high-growth regions, to enhance competitive positioning and expand offerings to homebuyers.

Comparison to Industry Standards

• The combined entity is established as a 'top-25 national homebuilder,' indicating a significant market position within the highly competitive U.S. homebuilding industry.
• The focus on 'attainable, consumer-driven, attached and detached single-family homes targeting entry level and first time move up buyers within high growth markets in the West, Central and Pacific Northwest regions' aligns with current industry trends emphasizing affordability and growth in specific geographic areas.
• Landsea Homes' prior recognition as 'Green Home Builder 2023 Builder of the Year' and '2022 winner of the prestigious Builder of the Year award' suggests a strong reputation for quality and sustainability, which could enhance the combined entity's brand and market appeal compared to competitors.

Management Changes

Corporate Governance

Related Party Transactions

• Equity contribution from funds managed by affiliates of Apollo (NYSE: APO), a global alternative asset manager, to fund the acquisition.
• Land banking capital from Millrose Properties (NYSE: MRP), which is acquiring $522 million of homesites under option with New Home in connection with the transaction.

Stakeholder Impact

• Shareholders of Landsea Homes received $11.30 per share in cash, resulting in the loss of their equity stake and public trading access.
• Warrant holders of Landsea Homes will have their warrants converted to the right to purchase one-tenth of the Merger Consideration, with a temporary reduced price until July 25, 2025, after which unexercised warrants will be cancelled.
• The management team of Landsea Homes has been replaced with new officers appointed for the Surviving Corporation, indicating a significant change in leadership.
• Creditors of Landsea Homes saw the termination of the Existing Credit Agreement and the redemption/cancellation of significant senior notes, altering the company's debt structure and creditor relationships.
• Customers and suppliers may experience changes as the combined entity aims to enhance offerings and leverage greater scale, potentially impacting service delivery and business relationships.

Next Steps

• The Company intends to file a certification and notice of termination of registration on Form 15 with the SEC.
• The Company intends to request termination of registration of Shares and Warrants under Section 12(g) of the Exchange Act.
• The Company intends to request suspension of reporting obligations under Section 13 and 15(d) of the Exchange Act.
• All outstanding unexercised Warrants will be deemed cancelled after July 25, 2025.

Key Dates

Recommendation

Keywords

Landsea Homes, New Home Co., acquisition, merger, tender offer, delisting, Nasdaq, homebuilder, real estate, debt repayment, senior notes, warrants, corporate governance, management changes, Apollo, Millrose Properties