– Combined Company Will Create a Leading
U.S. Homebuilding Platform With Approximately 25,000 Lots in 10
States –
Century Communities, Inc. (NYSE: “CCS”), a leading homebuilder
of single-family homes, townhomes and flats in select U.S. markets,
and UCP, Inc. (NYSE: “UCP”) today jointly announced a definitive
agreement pursuant to which the two companies have agreed to merge
in a transaction with an aggregate value of $336 million, including
the payment of certain indebtedness. The combined company will have
an equity market capitalization of over $700 million and an
enterprise value of over $1.3 billion.
The combined company will be in 10 states, 17 markets and 117
communities, with revenues of more than $1.3 billion and
inventories of more than $1.2 billion (calculated on a pro forma
basis at or for the year ended December 31, 2016).
In the merger, each outstanding share of UCP common stock will
be converted into the right to receive $5.32 in cash and 0.2309 of
a newly issued share of Century common stock. Based on the closing
sale price of Century’s common stock as reported yesterday on the
NYSE, the implied value of the total stock and cash consideration
to be received by UCP’s stockholders in the merger is $11.35 per
share, and UCP’s stockholders would own, on a pro forma basis,
approximately 16.4% of the combined company. The transaction is
expected to close by the end of the third quarter of 2017, subject
to customary closing conditions, including the adoption of the
merger agreement by UCP’s stockholders.
- Increased Scale – The combined company
will own or control approximately 25,000 lots and will have a
backlog in excess $450 million (calculated on a pro forma basis as
of December 31, 2016).
- Geographically Diverse Portfolio with
Essentially No Overlap – The combined company portfolio will
consist of lots and communities in California, Colorado, Georgia,
Nevada, North Carolina, South Carolina, Tennessee, Texas, Utah and
Washington. The combination provides for an expanded, national
footprint across high-growth markets, which we believe enhances
growth prospects while mitigating risks against any potential price
and value uncertainties in regional homebuilding markets.
- Seamless Integration and Enhanced
Platform – Century and UCP share culturally similar management
philosophies and strategic growth objectives which should provide
for a unified operating team with extensive land acquisition,
entitlement and development expertise.
- Earnings Accretion – The merger is
expected to be accretive to the company’s 2018 earnings per share
as a result of revenue and cost synergies and economies of
scale.
- Increased Market Liquidity – The merger
is expected to broaden the combined company’s investor base and
increase share liquidity due to the issuance of approximately 4.35
million shares of Century common stock.
Dale Francescon, Co-Chief Executive Officer of Century stated,
“We are pleased to announce the combination of Century and UCP
which will position the combined company as a leading homebuilder
with significant national scale. UCP’s highly complementary land
positions combined with Century’s existing portfolio creates a
diverse national growth platform and footprint.”
Rob Francescon, Co-Chief Executive Officer of Century noted,
“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, Chief Executive Officer of UCP, commented, “We are
pleased with the substantial progress we have made since our
founding in 2004 to execute on our strategy, expand our regional
presence and solidify our positions in very attractive Western and
Southeastern markets. 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.”
The transaction has been unanimously approved by the board of
directors of both Century and UCP. UCP’s largest shareholder, PICO
Holdings, Inc. (NASDAQ: “PICO”), has entered into a voting
agreement pursuant to which it has committed to vote 57% of UCP’s
outstanding voting power for the adoption of the merger agreement.
The voting agreement terminates automatically if the merger
agreement is terminated in accordance with its terms.
Century will fund the cash portion of the merger with available
borrowing capacity under its $400 million senior unsecured credit
facility.
Professional Advisors
J.P. Morgan Securities LLC served as financial advisor to
Century; Greenberg Traurig, LLP acted as Century’s legal counsel;
and Builder Advisor Group, LLC provided certain real estate
business services to Century.
Citi acted as financial advisor for UCP and Paul, Weiss,
Rifkind, Wharton & Garrison LLP acted as UCP’s legal
counsel.
About Century Communities
Founded in 2002, Colorado-based Century Communities is a builder
of single-family homes, townhomes and flats in select major
metropolitan markets in Colorado, Georgia, Nevada, Texas, Utah, and
North Carolina. The Company offers a wide variety of product lines
and is engaged in all aspects of homebuilding, including the
acquisition, entitlement and development of land and the
construction, marketing and sale of homes. Century Communities is a
top-25 U.S. homebuilder based on homes delivered. To learn more
about Century Communities please visit
www.centurycommunities.com.
About UCP, Inc.
UCP is a homebuilder and land developer with expertise in
residential land acquisition, development and entitlement, as well
as home design, construction and sales. UCP operates in the States
of California, Washington, North Carolina, South Carolina and
Tennessee. UCP designs and builds single-family homes for a variety
of lifestyles and budgets through its wholly-owned subsidiary,
Benchmark Communities, LLC.
Forward-Looking Statements
Statements in this news release that are not historical in
nature constitute forward looking statements. These forward-looking
statements relate to information or assumptions about the timing of
completion of the proposed acquisition, the expected benefits of
the proposed acquisition, management's plans, projections and
objectives for future operations, scale and performance,
integration plans and expected synergies therefrom, and anticipated
future financial and operating performance results, including
operating margin or gross margin capital and other expenditures,
cash flow, dividends, restructuring and other project costs, and
cost savings, and debt ratings. These statements are accompanied by
words such as "anticipate," "expect," "project," "will," "believe,"
"estimate" and similar expressions. Such expectations are based
upon certain preliminary information, internal estimates, and
management assumptions, expectations, and plans, and are subject to
a number of risks and uncertainties inherent in projecting future
conditions, events, and results. Actual results could differ
materially from those expressed or implied in the forward-looking
statements if one or more of the underlying assumptions or
expectations prove to be inaccurate or are unrealized. Important
factors that could cause actual results to differ materially from
those suggested by the forward-looking statements include, but are
not limited to, the occurrence of any event, change or other
circumstances that could give rise to the termination of the merger
agreement; the risk that the necessary stockholder approvals may
not be obtained; the risk that the necessary regulatory approvals
may not be obtained or may be obtained subject to conditions that
are not anticipated; the risk that the proposed acquisition will
not be consummated in a timely manner; risks that any of the
closing conditions to the proposed acquisition may not be satisfied
or may not be satisfied in a timely manner; risks related to
disruption of management time from ongoing business operations due
to the proposed acquisition; the risk that Century is unable to
retain its investment grade rating; failure to realize the benefits
expected from the proposed acquisition; the risk that the cost
savings and any other synergies from the acquisition may not be
fully realized or may take longer to realize than expected; the
future cash requirements of the combined company; general worldwide
economic uncertainties; failure to promptly and effectively
integrate the acquisition; and the effect of the announcement of
the proposed acquisition on the ability of Century and UCP to
retain customers and retain and hire key personnel, maintain
relationships with suppliers, on their operating results and
businesses generally and those factors listed in Century’s most
recently filed Annual Report on Form 10-K for the year ended
December 31, 2016 and UCP’s most recent Annual Report on Form 10-K
for the year ended December 31, 2016, in each case, filed with the
Securities and Exchange Commission (“SEC”). Changes in such
assumptions or factors could produce significantly different
results. There can be no assurance that the merger or any other
transaction described above will in fact be consummated in the
manner described, or at all. You should not place undue reliance on
these forward-looking statements, which speak only as of the date
of this document. Unless legally required, neither Century nor UCP
assumes any obligation, and expressly disclaims any such
obligation, to update any forward-looking statement as a result of
new information or future events or developments.
No Offer or Solicitation
The information in this communication is for informational
purposes only and is neither an offer to purchase, nor a
solicitation of an offer to sell, subscribe for or buy any
securities or the solicitation of any vote or approval in any
jurisdiction pursuant to or in connection with the merger or
otherwise, nor shall there be any sale, issuance or transfer of
securities in any jurisdiction in contravention of applicable law.
No offer of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act and otherwise in accordance with applicable law.
Important Additional Information and Where to Find it
In connection with the offering and sale of shares of Century
common stock in the merger, Century will file with the SEC a
Registration Statement on Form S-4 (the “Registration Statement”),
which will include a prospectus with respect to the shares to be
issued in the merger and a preliminary and definitive proxy
statement for the stockholders of UCP (the “Proxy Statement”),
which UCP will mail to its stockholders. The definitive
Registration Statement and the Proxy Statement will contain
important information about the merger and related matters. WE URGE
INVESTORS AND STOCKHOLDERS TO CAREFULLY READ THE REGISTRATION
STATEMENT AND THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS
FILED WITH THE SEC AND ANY AMENDMENTS OR SUPPLEMENTS TO THOSE
DOCUMENTS WHEN THEY BECOME AVAILABLE, BECAUSE THEY WILL CONTAIN
IMPORTANT INFORMATION ABOUT CENTURY, UCP AND THE PROPOSED MERGER.
Investors and stockholders will be able to obtain copies of the
Registration Statement, Proxy Statement and other documents (when
they become available) filed with the SEC by Century and UCP free
of charge at the SEC’s website, www.sec.gov. In addition, copies
will be available free of charge by accessing Century’s website at
www.centurycommunities.com by clicking on the “Investors” link,
then clicking on “Financial Information” and then clicking on the
“SEC Filings” link or by accessing the Investor Relations section
of UCP’s website at www.unioncommunityllc.com.
Participant in the Merger Solicitation
UCP, PICO, Century, and their respective directors and certain
of their respective executive officers and employees may be deemed
to be participants in the solicitation of proxies from the
stockholders of UCP in respect of the proposed acquisition
contemplated by the Proxy Statement. Information about UCP’s
directors and executive officers is set forth in its definitive
proxy statement for its 2016 Annual Meeting of Stockholders, which
was filed with the SEC on April 7, 2016, information about PICO’s
directors and executive officers is set forth in its definitive
proxy statement for its 2017 Annual Meeting of Stockholders, which
was filed with the SEC on March 21, 2017, and information about
Century’s directors and executive officers is set forth in its
definitive proxy statement for its 2017 Annual Meeting of
Stockholders, which was filed with the SEC on March 29, 2017, in
each case, together with any subsequent current reports on Form 8-K
filed pursuant to Item 5.02, as applicable to UCP, PICO and
Century. These documents are available free of charge from the
sources indicated above, from UCP at the Investor Relations section
of its website (http://www.unioncommunityllc.com), from PICO’s
website (http://investors.picoholdings.com) and from Century’s
website (http://www.centurycommunities.com).
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version on businesswire.com: http://www.businesswire.com/news/home/20170411005426/en/
Century Communities, Inc.Investor
Relations:303-268-8398InvestorRelations@CenturyCommunities.comorUCP,
Inc.Investor Relations:408-207-9499 Ext.
476Investorrelations@unioncommunityllc.com
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