Pulte Homes to acquire Centex in $1.3B deal-WEB ONLY

Pulte Homes Inc. agreed to acquire Centex Corp. today in a stock-for-stock deal valued at $1.3 billion that will create the nation’s largest homebuilding company.

The transaction, which also includes $1.8 billion of debt, will give the combined business a strong liquidity position with more than $3.4 billion in cash as of March 31.

The combined company will use the Pulte name and will be based in Bloomfield Hills, Mich., the current headquarters of Pulte. The companies said the business plans to maintain a significant presence in Dallas, where Centex is based.

Pulte Homes was the fourth largest homebuilder in the Indianapolis area in 2006, filing 441 home permits, according to IBJ statistics. Centex was one of the area’s top-five builders earlier this decade, filing 721 home permits in 2004. The companies have not provided information for more recent IBJ rankings.

According to company Web sites, Pulte has 70 homes for sale in 20 Indianapolis-area neighborhoods and Centex has 186 homes for sale in 26 area neighborhoods.

The pairing of Pulte and Centex comes at a time when homebuilders are still struggling to find their footing as credit remains tight and buyers continue to be leery of big-ticket purchases. The industry in turn has attempted to stem the bleeding by drastically scaling back new construction and throwing more incentives at potential buyers in order to unload existing inventory.

Pulte President and CEO Richard J. Dugas Jr. said the combination “puts us in an excellent position to navigate through the current housing downturn.”

As part of the deal, Centex shareholders will receive 0.975 shares of Pulte common stock for each share of Centex that they own. The transaction is valued at $10.50 per Centex share based on Pulte’s closing stock price of $10.77 yesterday.

Centex had approximately 124.4 million shares outstanding for the quarter ended Dec. 31, 2008.

The companies called the deal a merger, but Pulte stockholders will own about 68 percent of the combined business and Centex shareholders will own the remaining 32 percent.

Upon completion of the transaction, Dugas will assume the positions of chairman, president and CEO of Pulte Inc.

Both homebuilders’ boards unanimously approved the transaction.