Toll Brothers Inc. says it will issue more than 6 million shares and take on new debt to acquire rival homebuilder Shapell Industries in a deal valued at $1.6 billion, the Wall Street Journal reports.

Toll has a commitment for a $500 million, 364-day senior unsecured revolving credit facility, Fitch Ratings said in affirming its existing “BBB-” rating on the company’s debt. Toll Brothers intends to pay down debt by selling some of the land it will acquire in the deal, which is expected to close in March.

Shapell owns about 5,200 lots in the San Francisco Bay Area, Los Angeles, Orange County and Carlsbad, Calif.

“Toll has been operating in California since 1994 and knows the coastal markets of the state very well. Toll’s current average sales price in these markets is $840,000, and both companies serve affluent trade-up customers,” Fitch Ratings said in a statement published by Reuters.

“Entitled real estate is highly desired and in short supply in these coastal markets, and this acquisition will serve to meaningfully expand Toll’s real estate holdings in California and add scale to existing Toll operations within these markets. The addition of Shapell’s residential management team will add depth to Toll’s local homebuilding and land development team in coastal California.” Source:

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Inman Connect is LIVE next week! Join us and thousands of your peers from wherever you are.Register Today×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription