$BZH

Dream Finders to Acquire Rival Homebuilder Beazer in $2.2 Billion Deal

Dream Finders Homes (DFH) has agreed to acquire Beazer Homes USA (BZH) in a roughly $2.2 billion all-cash deal in a bid to create the sixth-largest homebuilder in the US, the companies said Friday.Under the terms of the deal, Beazer shareholders will receive $33.50 per share. The combined company's footprint is expected to cover 26 markets and about 520 active communities across the Southeast, Mid-Atlantic, Texas, the West, and the Midwest regions.The companies expect the deal to generate "significant" synergies and be double-digit percentage accretive to per-share earnings in year one, they said in a joint statement."This combination is the next meaningful step in our journey to become a top-5 national homebuilder, expanding our geographic reach, broadening the range of buyers we can serve, and strengthening the integrated services we offer families from contract to close," Dream Finders Chief Executive Patrick Zalupski said.In May, Beazer said its board rejected multiple unsolicited acquisition offers from Dream Finders, including a bid for $25.75 a share back then, saying it was "significantly" undervalued under those proposals."This transaction represents the culmination of a comprehensive review of opportunities to maximize value and provides Beazer shareholders with a significant and certain cash return in an uncertain market," Beazer CEO Allan Merrill said Friday.The transaction is expected to be close in the fourth quarter, subject to Beazer shareholders' approval and other conditions.Millrose Properties (MRP) announced a commitment to provide acquisition financing of up to $1.25 billion to support the Dream Finders-Beazer deal. Millrose intends to acquire home sites from the merged entity, the company said in a separate statement.Dream Finders shares were up 7.8% in Friday afternoon trade, while Beazer fell 1.1%. Millrose advanced 1.4%.Truist Securities said it will closely watch the proxy statement to be presented to Beazer shareholders, as it will likely reveal how many potential other bidders were involved, if any."We think there are buyers that could still be in the market for small- to mid-cap public homebuilders," the brokerage said in a note to clients, adding that the development could have implications for mid-cap builders, including KB Home (KBH) and Meritage Homes (MTH).Separately, Beazer reported Friday a fiscal third-quarter net loss of $0.16 a share, compared with a loss of $0.01 a year earlier. Revenue fell to $516.3 million from $545.4 million. The company withdrew its previously issued financial outlook, citing the Dream Finders deal. Dream Finders reaffirmed its 2026 guidance of approximately 9,250 home closings.Price: $14.52, Change: $+0.50, Percent Change: +3.53%