Executives at John Laing Homes had been looking for an investor to infuse the Newport Beach-based homebuilder with cash to expand.
Emaar Properties, a developer of futuristic masterplanned cities in the Middle East and Asia, was looking for a way to break into the U.S. housing market.
A billion-dollar deal was born.
Last week, longtime Orange County homebuilder Larry Webb and others at John Laing,part of Newport Beach-based WL Homes LLC,struck a deal to sell their company.
The buyer: Emaar Properties of Dubai in the United Arab Emirates, which is paying nearly $1.1 billion for John Laing.
The deal is largest yet for a privately held homebuilder.
“Our growth was limited with our existing ownership structure,” said Webb, the company’s chief executive.
With $1.6 billion in revenue last year, John Laing is the country’s second largest privately held homebuilder after Walnut-based J.F. Shea Co.’s Shea Homes.
But the company doesn’t have the deep pockets of the public companies that dominate the industry, including Miami-based Lennar Corp. and Dallas-based Centex Corp.
“We’d been interested in finding an equity partner,” Webb said. “Instead, we found an owner.”
Emaar, one of the biggest real estate companies in the Middle East, had been searching for a privately held U.S. homebuilder to buy for the past two years.
Talks with John Laing started in late 2005.
The deal is a big payday for Webb and Chairman Ray Watt, who are part of an investment group that owns the majority of the private company.
The company’s other big shareholder is General Motors Acceptance Corp., which stands to get $580 million in the deal.
Webb and others are set to keep running the business for Emaar. Watt plans to step down as chairman and remain as an honorary director.
Staying in charge appealed to Webb and others, he said.
If a publicly traded homebuilder had bought John Laing, it’s possible the executives would have been out of jobs, Webb said.
That’s why John Laing never seriously entertained previous buyout offers, he said.
The goal is to grow yearly sales as much as five-fold in coming years, he said.
The company plans to start scouting out locations to build at, with likely target markets in Arizona, Florida, Georgia and Texas.
But growing may not be as easy as it has been in the past few years. California, Nevada, Arizona and other hot markets are showing signs of slowing.
“The market is softening, which is a great time to expand,” Webb said. “Other homebuilders are laying people off. But we’re expanding. We’re doing the exact opposite of what they’re doing.”
For more on this story, see the June 6 edition of the Business Journal.
