Homebuilder William Lyon Files For an IPO

WLH offers investors a way to tap western U.S. real estate

   

TRI Pointe Homes‘ (NYSE:TPH) January IPO made it the first homebuilder to pull of a deal since 2004. The hysteria in the space was confirmed even more following a second homebuilder deal yesterday in the form of Taylor Morrison Home (NYSE:TMHC).

Well, don’t look now, but William Lyon Homes is about to score the turkey.

This week, the west-focused homebuilder filed for an IPO with plans to list on the NYSE under the ticker of “WLH.” Lead underwriters include Credit Suisse (NYSE:CS), Citi (NYSE:C) and JPMorgan (NYSE:JPM).

Founded more than 55 years ago, WLH is one of the largest homebuilders in the western U.S., with strong footprints in California, Arizona, Nevada and Colorado. The company owns over 11,800 lots, which represents a 13-year supply.

The founder and executive chairman of the company, retired Maj. Gen. William Lyon, has 58 years of experience in the homebuilding industry. He has assembled a top-notch team of executive officers and regional and division presidents that boast an average 28 years experience in the industry.

William Lyon, like other homebuilders, has taken full advantage of the rebound in the real estate market. Last year, WLH delivered 950 homes that had an average selling price of $275,000, resulting in $398.3 million in revenues, up 75% from 2011. That helped swing the company from a $193.3 million loss in 2011 to a $216.7 million profit — though a lot of that boost came from one-time items resulting from a reorganization. Still, when the real estate market booms, homebuilders generate profits.

And that booming market’s momentum should remain amid rock-bottom interest rates, declining numbers of distressed sales and low inventory levels. According to a report from JBREC, housing prices are expected to increase by 7.2% in 2013 and 8.7% in 2014. And the growth rates could be even higher in WLH’s core markets, especially California and Arizona. The company is ranked No. 3 in Orange County and Los Angeles Country and No. 5 in San Joaquin, which are all hot markets.

WLH itself is running hot so far in 2013, sporting a backlog of 406 sold but unclosed homes with a value of $115.4 million — a figure that has almost quadrupled since the end of 2011.

Like all things homebuilding-related right now, it looks like the sky’s the limit as long as the economy cooperates.

Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities, and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/ipo-playbook/homebuilder-william-lyon-files-for-an-ipo/.

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