Millrose Properties gets letter on Beazer deal financing

Millrose Properties, Inc. (NYSE: MRP) has received a letter from Goldman Sachs indicating confidence in arranging up to $500 million in financing for its planned support of Dream Finders Homes' proposed acquisition of Beazer Homes. The financing would enable Millrose to acquire homesites currently owned by Beazer Homes, supporting Dream Finders' capital-efficient growth in controlled homesites while preserving balance sheet flexibility.

The transaction is expected to temporarily increase Millrose's debt-to-capitalization ratio above its leverage policy target. However, the company has outlined plans to restore its leverage to target levels through potential accretive equity issuances above book value or organic deleveraging via operating cash flows, including proceeds from homesite sales.

Darren Richman, Chief Executive Officer of Millrose, emphasized the strategic value of the transaction, stating that it demonstrates the company's ability to facilitate capital-efficient M&A through its underwriting and operational platform. He noted that the increase in leverage would serve as a temporary bridge and that Millrose remains committed to its normal leverage policy.

Millrose's existing pipeline will continue to be funded through its unsecured credit facility and scheduled homesite sale proceeds. The company remains committed to its policy of not issuing equity below book value.

Millrose Properties operates as a premier homesite option platform for residential homebuilders, specializing in the acquisition and horizontal development of land to provide a predictable supply of finished homesites. The company employs a proprietary technology platform for real-time data analytics and rigorous independent due diligence on each transaction.

The letter from Goldman Sachs is subject to customary terms, conditions, and definitive documentation.