Schuler HomesSchuler Homes Inc. has closed on its purchase of the sixth-largest home builder in California in an all-stock deal worth about $234.2 million.
The purchase of Western Pacific
makes Schuler one of the 15 largest
home builders in the country
By Tim Ruel
The merger with Western Pacific Housing, announced in September and completed yesterday, creates one of the top 15 home builders in the United States, with a presence in Oregon, California, Washington, Hawaii, Colorado and Arizona. The combined company will continue to base its headquarters in Honolulu.
For the fiscal year that ended March 31, the two companies said they posted combined revenues of $1.3 billion with sales of more than 4,650 units. Net earnings for the year are anticipated at more than $75 million. In the next year, the companies expect net income of more than $86 million on revenues exceeding $1.5 billion.
Under the deal, Schuler shareholders exchange their 20.15 million outstanding shares on a 1-for-1 basis for Class A stock in a new holding company, while Western Pacific shareholders will acquire the same number of Class B shares in the holding company. Schuler shareholders will elect five of the nine board members of the new company, effectively giving them control.
Schuler's share price has risen 89.8 percent in the past year and closed yesterday at $11.63 per share, down 75 cents.
James K. Schuler, who owns 52 percent of Schuler Homes, will retain the titles of president and chief executive and become the combined company's co-chairman along with Eugene S. Rosenfeld, the founder and former chairman of Los Angeles-based Western Pacific.