Standard Pacific And Ryland Group To Merge

(RTTNews) - Standard Pacific Corp. (SPF) and The Ryland Group, Inc. (RYL) Sunday announced that their respective boards have unanimously approved a definitive merger agreement by whichStandard Pacific and Ryland will combine in a merger of equals to create a single company that would have an equity market capitalization of about $5.2 billion, an enterprise value of about $8.2 billion, and would own or control about 74,000 homesites.

At the time of the merger, Standard Pacific will implement a 1 for 5 reverse stock split, so that each 5 shares of Standard Pacific common stock will be combined into 1 share of Standard Pacific common stock. After giving effect to the reverse stock split, Ryland shareholders will receive 1.0191 shares of Standard Pacific common stock for each share of Ryland common stock (which would be 5.0957 shares prior to giving effect to the reverse stock split). Fractional shares will be paid out in cash.

Upon closing of the transaction, Standard Pacific stockholders will own approximately 59% and Ryland shareholders will own about 41% of the combined company.

It is currently anticipated that production, purchasing and other synergies from the announced transaction could result in annual cost savings of between $50-$70 million. The combined company expects to realize a significant portion of the estimated cost savings by late 2016.

Upon completion of the transaction, Standard Pacific President and Chief Executive Officer Scott Stowell will assume the position of Executive Chairman of the newly formed Board of Directors and Ryland President and Chief Executive Officer Larry Nicholsonwill assume the position of President and Chief Executive Officer.

Current Ryland Chief Operating Officer, Peter Skelly, and current Standard Pacific Chief Financial Officer, Jeff McCall, will serve in these roles for the combined company. Current Ryland Chief Financial Officer Gordon Milne will retire in connection with the transaction, after assisting with the integration of the two companies.

The board of directors of the combined company will consist of 10 persons, five of which (including Mr. Stowell) will be current Standard Pacific directors and five of which (including Mr. Nicholson) will be current Ryland directors.

The transaction is subject to approval by Standard Pacific and Ryland shareholders. The merger is expected to be completed in early Fall 2015, subject to the timing of the Securities and Exchange Commission review of the required prospectus and other stockholder related documents.