DUBAI DEVELOPER BUYS CAL HOME BUILDER
NEWPORT BEACH - 06/08/06 - A real estate company based in United Arab Emirates has acquired California home builder John Laing Homes for $1 billion in cash.
Southern California-based John Laing is the second-largest privately held home builder in the US and its acquisition marks the first US venture by Dubai-based Emaar Properties, one of the world's largest developers.
Some analysts suggest the deal, coming at a time when the nation's real estate market is slowing, may signal growing interest by foreign companies in the sector that is expected to see further consolidation after a five-year boom.
"It certainly bodes well for the long-term real estate market in this country, because you have a foreign company investing in a US-based home builder," said Patrick Duffy, managing director of industry market research firm Hanley Wood Market Intelligence.
The deal has been approved by the federal Committee on Foreign Investment in the United States (CFIUS).
John Laing Homes chalked-up revenues of $1.6 billion last year on 2,891 residential closings and ranked 20th among US home builders and owns or controls 150,000 undeveloped lots.
The deal will give the company resources to grow beyond its principal markets in California and Colorado, Larry Webb, John Laing's chief executive, said in a statement.
The company, the former US subsidiary of British construction giant John Laing plc, had not been pursuing a sale, he said, adding that Emaar first expressed an interest in acquiring the company last year.
Webb and other top executives have agreed to multi-year contracts and will reportedly continue to run the company, which will become a division of Emaar.
Emaar builds luxury housing and commercial developments throughout the world, with projects in a number of countries including Egypt, Turkey, India, Saudi Arabia, Morocco, and Pakistan.
Among its best-known projects is the Burj Dubai, which upon its completion in 2008 will be the world's tallest skyscraper.
The developer generated $2.3 billion in revenue last year and posted profit of $1.3 billion.
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