Home builders weigh possibility of merger

Standard Pacific, Engle in talks

by J. Craig Anderson - Dec. 24, 2008 12:00 AM
The Arizona Republic

Two home builders with a significant Valley presence say they are involved in talks about a possible merger.

Standard Pacific Corp. and TOUSA Inc., which operates in Arizona as Engle Homes, confirmed they are "engaged in preliminary discussions and the exchange of information . . . regarding a possible transaction," according to statements released by both companies.

Standard Pacific, based in Irvine, Calif., sells houses in eight Valley communities, including Cortessa in the northwest Valley, Vincenz in Gilbert and Canyon Trails in Goodyear.

Engle Homes sells houses in 10 local communities, including Verrado in Buckeye, Vistancia in Peoria and DC Ranch in Scottsdale. Parent company TOUSA is based in Hollywood, Fla.

TOUSA filed for Chapter 11 bankruptcy protection in January, two months after it was delisted by the New York Stock Exchange.

It reached a reorganization agreement with creditors in October that presumably includes the potential merger, although neither company is calling it a done deal.

Industry insiders say the common link between Engle and Standard Pacific is private equity firm MatlinPatterson Global Advisers, which specializes in revitalizing distressed companies.

The equity firm is the largest shareholder in Standard Pacific and one of TOUSA's major creditors.

Standard Pacific, which is traded on the New York Stock Exchange, announced Thursday that it had named MatlinPatterson partner Ken Campbell as its new president and chief executive officer, with founder Jeffrey Peterson stepping aside but staying on as a director of the company.