Blog Coverage: Home Construction Companies UCP and Century Communities Announce their Merger

LONDON, UK / ACCESSWIRE / April 12, 2017 / Active Wall St. blog coverage looks at the headline from San Jose, California based UCP, Inc., (NYSE: UCP) and Greenwood Village, Colorado based Century Communities, Inc. (NYSE: CCS) (“Century”) as both companies jointly announced their merger of on April 11, 2017. According to the merger agreement, UCP will be absorbed into Century and the transaction is valued at $336 million including debt. Register with us now for your free membership and blog access at:

http://www.activewallst.com/register/

Today, AWS is promoting its blog coverage on UCP and PICO; touching on CCS. Get all of our free blog coverage and more by clicking on the link below:

http://www.activewallst.com/register/

Details of the merger

As per the agreement, UCP’s shareholders will receive $5.32 in cash and 0.2309 share of the freshly issued Century’s common stock. Based on the closing price of Century’s stock on April 10, 2017, i.e. $26.10, the value of UCP’s share including cash and stock would be $11.35 per share. After the completion of the transaction, UCP’s shareholders will own approximately 16.4% stake in the newly merged Company. The deal is expected to be finalized in Q3 2017 and is subject to getting approvals from UCP’s shareholders, regulatory bodies and closing conditions.

The Board of Directors of both Companies have already approved the merger. PICO Holdings Inc. is the holding Company and majority shareholder of UCP. As majority shareholder with more than 57% stake in UCP, PICO has signed a voting agreement to vote in favor of the merger. In the event that the merger is not completed the voting agreement will be void.

The merged Company will have a market capital of over $700 million and an enterprise value of over $1.3 billion. The merged Company will have presence in 10 states, 17 markets, and 117 communities with over $1.2 billion in inventories (on pro forma basis for the year ending on December 31, 2016).

Century plans to finance the cash portion of the deal by issuing $400 million senior unsecured notes.

Benefits of the merger

The merged Company will be able to expand its scale of operations. The new entity is expected to own or control approximately 25,000 lots and will have a backlog in excess $450 million (on pro-forma basis for the year ending on December 31, 2016).

Since both UCP and Century operate in different markets and there is no overlap in their business areas, the merged Company will have operations across the state of California, Colorado, Georgia, Nevada, North Carolina, South Carolina, Tennessee, Texas, Utah, and Washington. The diverse presence will help the merged Company to handle price fluctuations and value uncertainties of the local markets and thus increase its profitability and opportunities for growth.

Since both UCP and Century have similar work cultures and business ethics the merger will be smooth and easily integrate both businesses as well as the experienced staff of both Companies.

The merger is expected to be accretive to the merged Company’s EPS in 2018 due to cost and revenue synergies as well as economies of scale.

The merger will also enable the new Company to expand its investor base since Century will be issuing approximately 4.35 million shares of Century’s common stock as a part of the merger agreement.

Commenting on the merger Rob Francescon, Co-Chief Executive Officer of Century stated:

“The merger facilitates expanded product offerings across the full buyer segment spectrum with cutting edge designs at multiple price points for maximum customer reach. The combined Company is expected to generate significant operating efficiencies which should create a rate of revenue growth and increased stockholder value in excess of what either Company could achieve on a standalone basis.”

Dustin Bogue, CEO of UCP, added:

“The merger with Century provides all of our stockholders with an opportunity to continue a portion of their equity investment and participate in the earnings growth, value accretion, synergies and enhanced prospects of a leading homebuilder with a more geographically diverse and risk-resistant national footprint. At the same time our stockholders will receive immediate cash liquidity for a portion of their investment in UCP.”

Stock Performance

At the closing bell, UCP, Inc.’s stock surged 22.04%, ending Tuesday’s session at $11.35. A total volume of 968.77 thousand shares were traded at the end of the day, which was higher than the 3-month average volume of 36.34 thousand shares. In the last six months and previous twelve months, shares of the Company have advanced 33.53% and 51.94%, respectively. The stock is trading at a PE ratio of 9.96 and currently has a market cap of $91.25 million.

At the close of trading session Tuesday, April 11, 2017, PICO Holdings’ share price finished the trading session at $14.45, advancing 6.25%. A total volume of 453.91 thousand shares exchanged hands, which was higher than the 3 months average volume of 65.08 thousand shares. The stock has advanced 32.81% and 37.75% in the last six months and past twelve months, respectively. At Tuesday’s closing price, the stock’s net capitalization stands at $329.75 million.

On Tuesday, the stock closed the trading session at $26.60, climbing 1.92% from its previous closing price of $26.10. A total volume of 782.58 thousand shares have exchanged hands, which was higher than the 3-month average volume of 146.75 thousand shares. Century Communities’ stock price soared 26.97% in the last three months, 28.81% in the past six months, and 48.27% in the previous twelve months. Furthermore, on a year to date basis, the stock rallied 26.67%. Shares of the company have a PE ratio of 11.43 and currently has a market cap of $580.41 million.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.

AWS has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the “Author”) and is fact checked and reviewed by a third party research service company (the “Reviewer”) represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the “Sponsor”), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you’re a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@activewallst.com

Phone number: 1-858-257-3144

Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street

ReleaseID: 459565