D.R. Horton has beat out Starwood Capital in the race to acquire Forestar, agreeing to buy 75% of the homebuilder’s shares for $17.75 apiece in cash, representing total consideration of roughly $560 million. Forestar had initially agreed to be acquired by Starwood for $14.25 per share in April, with the private equity firm raising its offer to $16 in recent weeks in an attempt to fend off D.R. Horton's late charge.
The deal should create significant synergies between D.R. Horton, a homebuilder, and Forestar, a land developer. Homebuilders in the US have struggled to capitalize on the recent recovery in the housing market due in part to rising land-acquisition costs, per Reuters.