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Pulte Homes and Centex Billion Dolar Deal, They have merge now, Dou You Know Pulte Holmes Or Centex ? Pulte Homes Inc. agreed to buy Centex Corp. for $1.3 billion in an all-stock deal that creates the largest U.S. homebuilder by revenue and throws each of them a lifeline in the worst housing slump since the 1930s. Pulte Holmes Centex Logo.

Pulte agreed to pay 0.975 of a share for each Centex share, valuing Centex at $10.50, or 38 percent more than yesterday’s closing price, the Bloomfield Hills, Michigan-based company said today in a statement. The transaction, approved by both companies’ boards, includes $1.8 billion in net debt.

“This is really good because not only are there too many homes, there are too many homebuilders,” said Vicki Bryan, a senior high-yield bond analyst for New York-based Gimme Credit LLC. “Cash is king and this gives them $3.4 billion, the most in the industry, which means they don’t need the banks.”

The companies agreed to a deal after Centex lost 70 percent of its value in the past year, while Pulte lost 30 percent. Pulte reported net losses for each of the last nine quarters and Centex has posted losses for the last seven quarters.

While neither Dugas nor Centex CEO Timothy Eller is predicting a turnaround for the industry, builders have rallied in the past month on speculation that lower mortgage rates will help the industry recover.

The 1.3 billion dollar stock swap is being done while both companies are hemorrhaging money in the housing downturn. The merging of assets, valued at a combined 7.2 billion dollar enterprise value should provide enough protection to make it through till the markets turn around.

The Pulte Homes name will be the new name of the company and the headquarters will remain in Bloomington Hills, Michigan. So, it looks like Pulte management will be the dominant force in the merger.

Centex-logo Directors of both companies have unanimously approved the deal. The combined company will use the Pulte name and will be based in Bloomfield Hills, Mich., where Pulte is based. The company plans to maintain a significant presence in Dallas, where Centex has its headquarters.

Under the agreement, Centex shareholders will receive 0.975 shares
of Pulte stock for each share of Centex they own. Based on the $10.77 closing price of Pulte stock on Tuesday, the transaction has a value of $10.50 a Centex share, a 37 percent premium over Centex closing price of $7.62 on Tuesday.

Upon closing, Pulte shareholders will own about 68 percent of the combined company, and Centex shareholders will own about 32 percent. NYTimes.com.

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