Jan. 16 (Bloomberg) -- Tri Pointe Homes LLC, a homebuilder controlled by Barry Sternlicht’s Starwood Capital Group LLC, filed to raise as much as $187.2 million in its initial public offering, seeking to cash in on growing demand for new homes.
Tri Pointe and Sternlicht, who currently owns 83.5 percent of the company, are offering 11.7 million shares at $14 to $16 each, according to a regulatory filing today.
Tri Pointe is the second U.S. builder to announce plans to go public since early December as housing stocks surge. Taylor Morrison Home Corp., based in Scottsdale, Arizona, is seeking to raise $250 million in an IPO, according to a Dec. 5 filing. The Standard & Poor’s Supercomposite Homebuilding index of 11 companies has about risen 74 percent in the past 12 months.
“Housing is taking off and has years to run,” Stephen Duffy, an investment banker with Moss Adams Capital LLC in Irvine, said in an e-mail. “While small, this conversion to the public market will allow TRI Pointe and Starwood Capital to leverage their capital with less-expensive public-market debt and equity. This will fuel the next phase of growth.”
Tri Pointe, led by Chief Executive Officer Douglas Bauer and two former executives he worked with at William Lyon Homes, builds houses in California and Colorado, markets where demand has been rising as employment improves after a five-year housing slump. U.S. home prices rose 7.4 percent in the 12 months through November, the biggest increase since May 2006, CoreLogic Inc. reported yesterday.
Starwood, based in Greenwich, Connecticut, committed to invest $150 million in the homebuilder in 2010. Sternlicht is chairman of the company.
A Starwood fund will own about 51.7 percent of Tri Pointe’s common stock after the offering, or 46.1 percent if underwriters exercise the option to buy additional shares, according to the filing.
The IPO terms suggest Tri Pointe will be valued at about $474 million, based on the midpoint of the range. Citigroup Inc., Deutsche Bank AG and FBR Capital Markets Co. are the lead underwriters.
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