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Taylor Morrison Home rises on market debut
April 10, 2013 / 2:45 PM / 5 years ago

Taylor Morrison Home rises on market debut

Chief Executive Officer and President of Taylor Morrison Sheryl Palmer watches as her company's stock begins trading during it's initial public offering on the floor at the New York Stock Exchange, April 10, 2013. REUTERS/Brendan McDermid

(Reuters) - Shares of private equity-backed homebuilder Taylor Morrison Home Corp (TMHC.N) rose as much as 8 percent on market debut, as IPOs by homebuilders continued to find favor with investors amid a recovery in the U.S. housing market.

Taylor Morrison shares opened at $23.35 and were trading up 6 percent at $23.23 in morning trade on the New York Stock Exchange on Wednesday.

The company had priced the 28.6 million shares in its IPO at $22 each, raising about $630 million and valuing itself at $2.68 billion.

It had filed in December to raise up to $250 million in the IPO, but doubled the proposed size earlier this month.

Taylor Morrison, whose owners include private equity firms TPG Capital and Oaktree Capital Management, was planning to sell 23.8 million shares at between $20 and $22 per share.

Following the offering, Oaktree and TPG Holdings each will have a 37.8 percent stake in the company.

The company is the latest among a slew of homebuilders taking advantage of a strong recovery in the market. The U.S. housing sector has got a boost from low mortgage rates and rising rents in recent months.

Traders gather for the initial public offering of Taylor Morrison on the floor at the New York Stock Exchange, April 10, 2013. Scottsdale, Arizona-based Taylor Morrison priced 28.6 million shares at $22, according to an underwriter. Shares of the homebuilder were expected to price in a range of $20 to $22. The offering was also upsized from an original size of 23.8 million shares. REUTERS/Brendan McDermid

Following the uptick in the housing market, a number of private companies are looking to tap public markets amid strong investor appetite for real estate stocks.

Homebuilder Tri Pointe Homes Inc (TPH.N) and plywood and lumber maker Boise Cascade Co (BCC.N) both had successful debuts earlier this year, and their shares have risen since.

Two other homebuilders -- UCP LLC and William Lyon Homes -- have also announced their intention to go public.

Scottsdale, Arizona-based Taylor Morrison closed 4,014 homes in 2012, generating net income of $430.8 million on revenue of $1.4 billion.

It estimated that in the first two months of this year alone, sales orders totaled 976 homes. As of February end, the company had a backlog of 4,547 homes, up 31 percent compared to a year earlier, according to its filings.

Global equity fundraisings surged 24 percent in the first quarter from a year ago as strong markets and easing economic concerns encouraged more companies to raise capital through initial public offerings and other capital market transactions.

Credit Suisse and Citigroup acted as lead underwriters to the offering.

Reporting by Anil D'Silva and Aman Shah in Bangalore; Editing by Sreejiraj Eluvangal

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