William Lyon Homes’ $460 Million Acquisition of RSI Communities


J.P. Morgan Securities, LLC acted as exclusive financial advisor for William Lyon Homes and Latham & Watkins LLP acted as legal advisor. Citi acted as exclusive financial advisor for RSI and O’Melveny & Myers LLP acted as legal advisor.

William Lyon Homes (NYSE: WLH), a leading homebuilder in the Western U.S., has entered into a definitive agreement to acquire RSI Communities (“RSI”), a Southern California and Texas based homebuilder, and three additional related real estate assets for an aggregate cash purchase price of approximately $460 million. The transaction marks the Company’s entry into Texas and is expected to close in the first quarter of 2018, subject to the satisfaction of certain closing conditions.

RSI Communities has operated in the Inland Empire of Southern California and the Austin and San Antonio, Texas markets since being founded by Newport Beach based entrepreneur and building products veteran, Ron Simon, and 30-year homebuilding veteran, Todd Palmaer. As of December 31, 2017, RSI owned or controlled 11,128 lots, including 6,895 in Austin, Texas, 1,060 in San Antonio, Texas and 3,173 in the Inland Empire, California. RSI primarily targets the entry level and first time buyer segments.

The Company intends to fund the acquisition with cash on hand, debt, and approximately $200 million in land banking proceeds to be provided by Hearthstone.

The transaction is subject to the satisfaction of customary closing conditions and regulatory approvals and is expected to close in March of 2018.

William Lyon Homes is one of the largest Western U.S. regional homebuilders. Headquartered in Newport Beach, California, the Company is primarily engaged in the design, construction, marketing and sale of single-family detached and attached homes in California, Arizona, Nevada, Colorado, Washington and Oregon. Its core markets include Orange County, Los Angeles, the Inland Empire, the San Francisco Bay Area, Phoenix, Las Vegas, Denver, Portland and Seattle.

RSI Communities LLC builds and sells new homes and residential communities in Southern California and Texas. The company is based in Newport Beach (CA).

O’Melveny represented RSI Communities with a team including Mark Easton (Picture), Reid Jason and Brian Kenyon, Adam Ackerman and Bianca Harlow.

Involved fees earner: Mark Easton – O’Melveny & Myers LLP; Reid Jason – O’Melveny & Myers LLP; Adam Ackerman – O’Melveny & Myers LLP; Bianca Harlow – O’Melveny & Myers LLP; Brian Kenyon – O’Melveny & Myers LLP;

Law Firms: O’Melveny & Myers LLP;

Clients: RSI Communities LLC;

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Author: Ambrogio Visconti