Century Communities, a homebuilder based in Greenwood Village, and UCP Inc., a builder based in San Jose, Calif., announced plans Tuesday to merge in a deal valued at $336 million.
Century Communities will pay UCP shareholders $5.32 in cash and 0.23 shares of newly issued Century Communities common stock for each share they hold, giving them a 16.5 percent ownership stake in the combined company.
The two companies will operate in Colorado and nine other states and have access to 117 communities and about 25,000 lots. Last year, their combined sales ran more than $1.3 billion. Moody’s said it may upgrade Century Communities’ debt ratings, given its larger size.
“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,” said Rob Francescon, Century’s co-CEO said in a statement.
Century will borrow against its $400 million credit line to fund the cash payment to UCP shareholders, who must still approve the merger. The deal is expected to close in the third quarter.
