Lennar buys CalAtlantic

In corporate news, CalAtlantic Group (CAA 49.15, +8.71) has surged 22.0% after agreeing to be acquired by Lennar (LEN 55.90, -2.11) for $9.3 billion in a stock and cash deal.

CalAtlantic was a merger of two builders a couple of years ago. They were #5 builder in the 2017 Home Builder Magazine list with 14,928 closings and revenue of $6.38 billion. (LGI Homes 4,163 closings valued at $838 million).Lennar was #2 builder. The purchase makes them #1, ahead of D R Horton. CalAtlantic had recently acquired Rylnad omes and Standard Pacific.

Side note: CalAtlantic had a net debt/capital of 42.3% compared to LGI Home’s 46.4%.
CalAtlantic pretax income $726.2 million, +88.2%, LGIH $111.5 million +…? 43% ???

If I take $9.3 x 112/726 = $1.42 billion compared to LGIH actual market cap of $1.3 billion. But CalAtlantic popped 22% to get to that market cap…