News

Landsea Homes Corporation LSEA has entered a definitive agreement to acquire a Dallas-Fort Worth based homebuilder, Antares Homes.

The company shares optimistic views on this anticipated acquisition, as it believes that the market reach of Antares Homes will provide it with the perfect opportunity to achieve more size and scale in Texas.

Shares of this publicly traded residential homebuilder declined 1.8% during the trading hours but increased 2.1% in the after-hours trading session on Jan 9.

The Acquisition in Details

Post closing, this strategic transaction is expected to expand the footprint of Landsea in the Dallas/Fort Worth metropolitan area and an additional 13 cities. This buyout is expected to add 2,298 owned or controlled lots to Landsea's portfolio.

The acquisition value is considered to be $232.2 million in cash, which includes the repayment of Antares Homes’ debt with an anticipated value of $47.2 million. Landsea expects to use a mix of cash and borrowings under its revolving credit facility for the transaction under the financial supervision of Vestra Advisors LLC. This strategic buyout is expected to close in early February of 2024, subject to customary closing conditions’ satisfaction.

Acquisition Initiatives Bode Well

Landsea intently focuses on expanding its market reach and footprint through accretive buyouts. Its main aim is to focus on more affordable segments of the market with a differentiated high-performance home series, accompanied by a land light strategy for a quick return on inventory. The company consistently searches for acquisition targets that fit best with this model, thus increasing its growth prospects.

Recently, on Oct 19, 2023, Landsea announced its expansion into the Colorado housing market by acquiring the assets and lot inventory of Richfield Homes. With this acquisition, Landsea entered its seventh homebuilding market, thus showcasing a notable presence in one of the best housing markets in the country.

During the third-quarter 2023earnings call LSEA stated that given the rise in interest rates, it would primarily consider acquisitions to fuel growth opportunities.

Image Source: Zacks Investment Research

Thanks to these tailwinds, shares of Landsea have gained 51.1% in the past three months, outperforming the Zacks Real Estate - Development industry’s 9.4% growth.

Zacks Rank & Key Picks

Landsea currently carries a Zacks Rank #3 (Hold).

Here are some better-ranked stocks from the Zacks Finance sector.

Equinix, Inc. EQIX presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

It has a trailing four-quarter earnings surprise of 6.2%, on average. The stock has gained 11.5% in the past year. The Zacks Consensus Estimate for EQIX’s 2024 sales and earnings per share (EPS) suggests rises of 8.3% and 7.7%, respectively, from the year-ago period’s reported levels.

Everest Group, Ltd. EG currently flaunts a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 24.5%, on average. The stock has gained 4.4% in the past year.

The Zacks Consensus Estimate for EG’s 2024 sales and EPS suggests growth of 14.9% and 12.6%, respectively, from the year-ago period’s levels.

Chubb Limited CB sports a Zacks Rank of 1 at present. It has a trailing four-quarter earnings surprise of 6.5%, on average. The stock has inched up 0.1% in the past year.

The Zacks Consensus Estimate for CB’s 2024 sales and EPS suggests growth of 7.8% and 7.3%, respectively, from the year-ago period’s levels.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.0% per year. So be sure to give these hand-picked 7 your immediate attention.

See them now >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.