Subject: Re: Berkshire Hathaway to Acquire Taylor Morrison Home
Berkshire agreed to pay $72.50 a share in cash for Taylor Morrison, valuing the homebuilder at roughly $6.8 billion in equity value and $8.5 billion including debt. Analysts at Citizens said the valuation appears modest compared with recent deals in the industry.
"Based on recent completed transaction multiples, the 0.9x price-to-tangible book value multiple we estimate Berkshire is paying appears low relative to recent public builder transactions," Citizens analysts wrote.

They noted that the acquisition of Tri Pointe Homes earlier this year implied a multiple of roughly 1.2 times forward tangible book value, while MDC Holdings was purchased at about 1.3 times tangible book value last year.

"Given Clayton Homes is already the largest producer of manufactured & modular housing in the US, we believe Berkshire could leverage this transaction to infuse additional off-site construction methods at TMHC," UBS said in a note. "We expect continued consolidation of the US homebuilders, which could provide a meaningful catalyst for industry improvement, efficiency gains and stock price appreciation."

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