March 15 (Bloomberg) -- Taylor Morrison Home Corp., a builder of houses in the U.S. and Canada, is moving ahead with a U.S. initial public offering next week, people with knowledge of the matter said.
The homebuilder will begin pitching the sale to investors next week and expects to complete the IPO within about two weeks of starting the marketing, said the people, who asked not to be named because the process is private. Taylor Morrison filed for an IPO with a $250 million placeholder amount in December and later increased the amount to $500 million.
Taylor Morrison, based in Scottsdale, Arizona, is seeking to benefit from a recovery in home sales and prices, which have climbed following the worst housing crash since the Great Depression. The company’s owners, which include TPG Capital and Oaktree Capital Management LP, are taking advantage of rising demand for new equities as record-high U.S. stocks help fuel a pickup in the IPO market.
An official at Taylor Morrison didn’t immediately respond to a request for comment.
Tri Pointe Homes Inc., an Irvine, California-based builder backed by Barry Sternlicht, raised $233 million in a Jan. 30 stock sale, the first homebuilder IPO since 2004. As many as five closely held homebuilders may go public within two years, as the industry bounces back, according to Robert Crowley, a managing director at Moelis & Co. who advised Tri Pointe.
Shares of Tri Pointe, which were offered at $17, gained 12 percent since the IPO through yesterday, compared with a 4.1 percent increase for the Standard & Poor’s 500. The 11-member S&P Supercomposite Homebuilding Index has risen 60 percent over the past 12 months, compared with an 11 percent gain for the S&P 500.
Housing starts probably rose to an annual pace of 915,000 in February, the median of 45 estimates compiled by Bloomberg. The pace was 890,000 in January, according to the Commerce Department, which reports February data on March 19.
Taylor Morrison builds homes in Arizona, California, Colorado, Texas, Florida and Ontario, Canada. It was sold for $955 million in 2011 by its British parent, Taylor Wimpey Plc, to a group of investors backed by David Bonderman’s TPG, Los Angeles-based Oaktree and JH Investments Inc.
The homebuilder joins at least two other companies that aim to complete IPOs larger than $500 million. Pinnacle Foods Inc., the frozen vegetable maker that’s owned by Blackstone Group LP, is seeking $580 million in an offering scheduled for March 27, regulatory filings and data compiled by Bloomberg show. West Corp., the telecommunications-services provider that’s controlled by Thomas H. Lee Partners, is attempting to raise $532 million in a March 21 IPO.
Credit Suisse Group AG and Citigroup Inc. are leading the offering for Taylor Morrison, which plans to list on the New York Stock Exchange under the symbol TMHC. Representatives at Credit Suisse and Citigroup declined to comment.
To contact the reporter on this story: Lee Spears in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Jeffrey McCracken at email@example.com