Shares of The New Home Company (NYSE: NWHM) are rallying after the company entered into an agreement to be acquired by funds managed by affiliates of Apollo Global Management (NYSE: APO).
The all-cash transaction will see Apollo pay $9.00 per share, valuing the company at approximately $338 million.
The purchase price represents an 85% premium to the closing stock price on July 22 and a 51% premium to the 90-day volume-weighted average price.
The transaction will be financed with equity provided by the Apollo Funds and, if required, a committed debt financing package. Once the deal has gone through, NWHM will become a private company no longer listed.
“Over the last several years, we have transformed the company into a growing and diversified builder with operations in three states,” said Lawrence Webb, Executive Chairman of The New Home Company Board of Directors.
“We have strengthened our balance sheet, streamlined our cost structure and repositioned our product offerings to cater to a deeper pool of buyers. Apollo’s ability to provide flexible capital and deep knowledge of the homebuilding industry will help us to accelerate the growth of our business,” added Webb.
The New Home Company's shares have climbed 82.7% to $8.88 following the announcement.
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