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Major Homebuilder Goes for an IPO

Taylor Morrison Home is set to ride a bullish tide in housing


Homebuilder Taylor Morrison Home has filed for an IPO and plans to raise up to $250 million. The lead underwriters include Credit Suisse (NYSE:CS) and Citigroup (NYE:C). The proposed ticker is TMHC (the filing doesn’t indicate what exchange the company will list on).

When the offering hits the market, Taylor Morrison will be the sixth-largest public homebuilder in North America (in terms of 2011 revenues). Founded over 75 years ago, the company focuses on single-family detached and attached homes. It also has a strong business operation in Canada (under the Monarch brand).

Exchange Stocks May Be Down for the Count
Exchange Stocks May Be Down for the Count

For the first nine months of this year, Taylor Morrison built 2,586 homes with an average price of $347,000. During this time, revenues soared 47% to $879 million, and EBITDA was $125.1 million. The company has a substantial backlog of 4,205 homes.

The real estate market has been perking up lately. No doubt, record-low mortgage interest rates are one reason. But there has also been a dearth of building. From 2008 to 2011, the average new home starts were 663,000. This compares to an average of 1.55 million between 1960 to 2007.

Wall Street has been aggressively bidding up the homebuilding sector. Consider that shares of KB Home (NYSE:KBH), Ryland Group (NYSE:RYL) and Hovnanian Enterprises (NYSE:HOV) are all up over 100% for 2012. So, the timing for Taylor Morrison’s IPO looks spot-on.

Tom Taulli runs the InvestorPlace blog IPO Playbook, a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “How to Create the Next Facebook” and “High-Profit IPO Strategies: Finding Breakout IPOs for Investors and Traders.”  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,

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