IRVINE and WESTLAKE VILLAGE,
Calif., June 14, 2015
/PRNewswire/ -- Standard Pacific Corp. (NYSE: SPF) and The
Ryland Group, Inc. (NYSE: RYL) today jointly announced that their
respective boards of directors have unanimously approved a
definitive merger agreement pursuant to which Standard Pacific and
Ryland will combine in a merger of equals to create a single
company that would have an equity market capitalization of
approximately $5.2 billion, an
enterprise value of approximately $8.2
billion, and would own or control approximately 74,000
homesites. In the 12 months ended March 31, 2015, the pro forma combined company
delivered more than 12,600 homes in the aggregate with combined pro
forma revenues of $5.1
billion.
The exchange ratio was established based on the 28 day volume
weighted trading price of each company's common stock for the
period commencing May 5, 2015 and
ending June 12, 2015. At the
time of the merger, Standard Pacific will implement a 1 for 5
reverse stock split, so that each 5 shares of Standard Pacific
common stock will be combined into 1 share of Standard Pacific
common stock. After giving effect to the reverse stock split,
Ryland shareholders will receive 1.0191 shares of Standard Pacific
common stock for each share of Ryland common stock (which would be
5.0957 shares prior to giving effect to the reverse stock
split). Fractional shares will be paid out in cash.
Upon closing of the transaction, Standard Pacific stockholders will
own approximately 59% and Ryland shareholders will own
approximately 41% of the combined company.
Standard Pacific President and Chief Executive Officer
Scott Stowell said, "Combining two
industry leaders with nearly 100 years of homebuilding experience
between them puts us in a strong position to benefit from the
continued housing market recovery. With this merger we gain
both geographic and product diversification, expanding our reach
and enhancing our growth prospects in the entry level, move-up and
luxury market segments. Together, we will build homes in 20
of the top 25 MSAs in the United
States and will enjoy top 5 market share in 15 of these
MSAs."
Ryland President and Chief
Executive Officer Larry Nicholson
said, "Today our industry reaches a significant milestone as two of
its best operators combine forces. With similar cultures and
long histories of crafting quality homes and providing superior
customer service, we are each proud of where we've been and look to
the future confident that we will be better together. Scott and I
look forward to working together as we lead our combined companies
to an even higher level of construction quality, customer
satisfaction and operational excellence."
Complementary Price Points and Geographies
The combination of Standard Pacific and Ryland will offer
well-crafted homes in thoughtfully designed communities that meet
the desires of customers across the homebuilding spectrum, from
entry level to luxury, in 41 MSAs spanning 17 states. This
powerful price point and geographic diversity positions the
combined company to gain combined efficiencies, while mitigating
risk against changes in consumer sentiment and significantly
reducing the potential impact of a downturn in any particular
geography.
Efficiencies and Cost Savings
It is currently anticipated that production, purchasing and
other synergies from the announced transaction could result in
annual cost savings of between $50-$70
million. The combined company expects to realize a
significant portion of the estimated cost savings by late 2016.
Management, Board and Corporate Presence
Upon completion of the transaction, Mr. Stowell will assume the
position of Executive Chairman of the newly formed Board of
Directors and Mr. Nicholson will assume the position of President
and Chief Executive Officer. Current Ryland Chief Operating
Officer, Peter Skelly, and current
Standard Pacific Chief Financial Officer, Jeff McCall, will serve in these roles for the
combined company. Current Ryland Chief Financial Officer
Gordon Milne will retire in
connection with the transaction, after assisting with the
integration of the two companies.
The board of directors of the combined company will consist of
10 persons, five of which (including Mr. Stowell) will be current
Standard Pacific directors and five of which (including Mr.
Nicholson) will be current Ryland directors. William Jews, current Chairman of the Board of
Ryland, will serve as the combined company's lead independent
director. Ronald Foell,
co-founder and Chairman of the Board of Standard Pacific, will
retire at the time of closing, which happens to coincide with the
company's 50th anniversary, a remarkable milestone for
Mr. Foell. A final roster of directors will be announced in
conjunction with the closing of the merger.
To ensure a successful transition, an integration committee will
be formed and will be headed by Mr. Stowell.
The combined company plans to operate as one brand and will
announce its new name prior to the closing of the
transaction. Currently both companies' headquarters are
located in Southern California --
Standard Pacific in Irvine and
Ryland in Westlake Village. Given the size of the combined
company, within the next two years the combined company expects to
develop a corporate presence on the east coast, while continuing to
maintain a corporate presence in California.
Approvals and Timing
The transaction is subject to approval by Standard Pacific and
Ryland shareholders. MP CA Homes LLC, Standard Pacific's
largest stockholder and an affiliate of MatlinPatterson Global
Advisers LLC, has agreed to vote its shares in favor of the
transaction. The merger is expected to be completed in early
Fall 2015, subject to the timing of the Securities and Exchange
Commission review of the required prospectus and other stockholder
related documents. The transaction is intended to qualify as
a tax-free reorganization for U.S. federal income tax purposes.
Advisors
J.P. Morgan Securities LLC served as exclusive financial advisor
to Standard Pacific and Lazard served as financial advisor to
Ryland. Ropes & Gray LLP acted as legal counsel to
Standard Pacific and Gibson Dunn & Crutcher LLP acted as legal
counsel to Ryland.
Conference Call
A conference call to discuss this release will be held at
8:00 a.m. Eastern time June 15, 2015. The call will be broadcast
live over the Internet and can be accessed through the Standard
Pacific's website at http://ir.standardpacifichomes.com and
Ryland's website at http://investor.shareholder.com/ryl/. The
call will also be accessible via telephone by dialing (888)
455-2295 (domestic) or (719) 457-2552 (international);
Passcode: 2790581. The audio transmission with
the slide presentation will be available on both websites for
replay within 2 to 3 hours following the live broadcast, and can be
accessed by dialing (888) 203-1112 (domestic) or (719) 457-0820
(international); Passcode: 2790581. Please click here for a
copy of the slides.
About Standard Pacific
Standard Pacific (NYSE: SPF) has been building beautiful,
high-quality homes and neighborhoods since its founding in
Southern California in 1965.
With a trusted reputation for quality craftsmanship, an
outstanding customer experience and exceptional architectural
design, Standard Pacific utilizes its decades of land acquisition,
development and homebuilding expertise to successfully navigate
today's complex landscape to acquire and build desirable
communities in locations that meet the high expectations of the
company's targeted move-up homebuyers. Currently offering new
homes in major metropolitan areas in Arizona, California, Colorado, Florida, North
Carolina, South Carolina,
and Texas, we invite you to learn
more about us by visiting www.standardpacifichomes.com.
About Ryland
Headquartered in Southern
California, Ryland (NYSE: RYL) is one of the nation's
largest homebuilders and a leading mortgage-finance company. Since
its founding in 1967, Ryland has built more than 315,000 homes and
financed more than 260,000 mortgages. Ryland currently
operates in 17 states across the country. For more information,
please visit www.ryland.com.
Forward Looking Statements
This news release contains forward-looking statements.
These statements include but are not limited to statements
regarding the benefits of the merger and the expected timing for
closing the merger; new home orders; deliveries; backlog;
absorption rates; cancellation rates; average home price; revenue;
profitability; cash flow; liquidity; gross margin; operating
margin; product mix; land supply; the benefit of, and execution on,
Standard Pacific's and Ryland's strategies; Standard Pacific's and
Ryland's future cash needs and the availability of additional bank
commitments; the spring selling season; and Standard Pacific's and
Ryland's future growth and performance. Forward-looking
statements are based on our current expectations or beliefs
regarding future events or circumstances, and you should not place
undue reliance on these statements. Such statements involve
known and unknown risks, uncertainties, assumptions and other
factors many of which are out of Standard Pacific's and Ryland's
control and difficult to forecast that may cause actual results to
differ materially from those that may be described or
implied. Such factors include but are not limited to:
Standard Pacific and Ryland may be unable to obtain stockholder
approval as required for the merger; conditions to the closing of
the merger may not be satisfied or waived; the transaction may
involve unexpected costs, liabilities or delays; Standard Pacific's
and Ryland's business may suffer as a result of the uncertainty
surrounding the transaction; the outcome of any legal proceeding
relating to the transaction; Standard Pacific and Ryland may be
adversely affected by other economic, business and/or competitive
factors; the occurrence of any event, change or other circumstances
that could give rise to the termination of the merger agreement;
the ability of the surviving corporation to recognize benefits of
the transaction; risks that the transaction disrupts current plans
and operations and the potential difficulties faced by the
surviving corporation in employee retention as a result of the
transaction; other risks to consummation of the transaction,
including the risk that the transaction will not be consummated
within the expected time period or at all; local and general
economic and market conditions, including consumer confidence,
employment rates, interest rates, the cost and availability of
mortgage financing, and stock market, home and land valuations; the
impact on economic conditions, terrorist attacks or the outbreak or
escalation of armed conflict involving the United States; the cost and availability
of suitable undeveloped land, building materials and labor; the
cost and availability of construction financing and corporate debt
and equity capital; Standard Pacific's and Ryland's significant
amount of debt and the impact of restrictive covenants in each
company's debt agreements; Standard Pacific's and Ryland's
respective ability to repay their debt as it comes due; changes in
Standard Pacific's and Ryland's credit rating or outlook; the
demand for and affordability of single-family homes; the supply of
housing for sale; cancellations of purchase contracts by
homebuyers; the cyclical and competitive nature of the business;
governmental regulation, including the impact of "slow growth" or
similar initiatives; delays in the land entitlement process,
development, construction, or the opening of new home communities;
adverse weather conditions and natural disasters; environmental
matters; risks relating to mortgage banking operations; future
business decisions and the combined company's ability to
successfully implement its operational and other strategies;
litigation and warranty claims; and other risks discussed in
Standard Pacific's and Ryland's filings with the Securities and
Exchange Commission, including the Annual Report on Form 10-K for
the year ended Dec. 31, 2014 and
subsequent Quarterly Reports on Form 10-Q for each of Standard
Pacific and Ryland. Standard Pacific and Ryland assume no,
and hereby disclaim any, obligation to update any of the foregoing
or any other forward-looking statements. Standard Pacific and
Ryland nonetheless reserve the right to make such updates from time
to time by press release, periodic report or other method of public
disclosure without the need for specific reference to this press
release. No such update shall be deemed to indicate that
other statements not addressed by such update remain correct or
create an obligation to provide any other updates.
Additional Information
In connection with the proposed transaction, Standard Pacific
and the Ryland will be filing documents with the SEC, including the
filing by Standard Pacific of a registration statement on Form S-4,
and Standard Pacific and Ryland intend to mail a joint proxy
statement regarding the proposed merger to their respective
stockholders that will also constitute a prospectus of Standard
Pacific. Before making any voting or investment decision,
investors are urged to read the joint proxy statement/prospectus
when it becomes available because it will contain important
information about the proposed transaction. You may obtain
copies of all documents filed with the SEC regarding this
transaction, free of charge, at the SEC's website (www.sec.gov), by
accessing Standard Pacific's website at
www.standardpacifichomes.com under the heading "Investor Relations"
and then under the link "SEC Filings" and from Standard Pacific by
directing a request to Standard Pacific Corp., 15360 Barranca
Parkway, Irvine, California 92618,
Attention: Secretary, and by accessing Ryland's website at
www.ryland.com under the heading "Investors" and then under the
link "SEC Filings" and from Ryland by directing a request to The
Ryland Group, Inc., 3011 Townsgate Rd., Ste. 200, Westlake Village, California 91361,
Attention: Investor Relations.
Standard Pacific and Ryland and their respective directors and
executive officers and certain other members of management and
employees may be deemed to be participants in the solicitation of
proxies in respect of the proposed transaction. You can find
information about Standard Pacific's directors and executive
officers in its definitive proxy statement filed with the SEC on
April 24, 2015. You can find
information about Ryland's directors and executive officers in its
definitive proxy statement filed with the SEC on March 13, 2015. Other information regarding
the participants in the proxy solicitation and a description of
their direct and indirect interests, by security holding or
otherwise, will be contained in the joint proxy
statement/prospectus and other relevant materials to be filed with
the SEC when they become available. You can obtain free
copies of these documents from Standard Pacific and Ryland using
the contact information above.
Contact: Jeff McCall, EVP
& CFO (949) 789-1655, jmccall@stanpac.com
Contact: Gordon Milne, EVP &
CFO (805) 367-3720, gmilne@ryland.com
Media Contact:
Danielle Tocco
Standard Pacific Homes
National Director of Communications
dtocco@stanpac.com
Direct Line: 949.789.1633
Cell: 714.296.0451
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visit:http://www.prnewswire.com/news-releases/standard-pacific-corp-and-the-ryland-group-inc-announce-merger-of-equals-creating-americas-fourth-largest-homebuilding-company-300098797.html
SOURCE Standard Pacific Corp.; The Ryland Group, Inc.