SALT LAKE CITY-Those who follow @GlobeStcom on Twitter and @GlobeStLIVE may have seen a post teasing the announcement, but GlobeSt.com has learned that Woodside Homes has closed a major recapitalization that positions the company for growth. The company has refinanced its existing debt, significantly increased its liquidity, and strengthened its balance sheet.
In less than three years since emerging from a complicated chapter 11 reorganization, Woodside is well positioned to capture the momentum of a recovering market, according to a prepared statement. The recapitalization transaction includes the issuance of $128 million in notes that refinances its existing debt from the plan of reorganization, and a $75 million equity offering to existing shareholders.
Moelis & Co. acted as exclusive financial advisor and sole arranger to Woodside. “When we restructured in 2010, management was tasked to develop a solution that maximizes the long-term value of the company,” says Joel Shine, CEO of Woodside. “The new Woodside has gained market share and is operating profitably in every one of our divisions, and this recapitalization is proof that our investors agree that we are in a position of strength.”
Shine is enthusiastic about the company’s new investors and renewed strength. “We obtained about $75 million in equity from our largest and most sophisticated shareholders,” he notes. “We also refinanced our existing debt. We have several equity investors as our largest shareholders and even though we have acquired more than 35 projects in the last 18 months, they are giving us the platform to accomplish even more.”
John Burns of John Burns Consulting states, “this additional capital will allow them to grow market share in their current market footprint, which includes the hottest housing markets in the country, and where I believe the demand/supply imbalances will be greatest.”
According to Mark Porath, a Woodside board member since the company’s reorganization and founder and CEO of Hearthstone, the largest private equity firm committed to
for-sale homebuilding in the nation, “Over the past two and a half years Woodside has refined their operating model while retaining staff. The Woodside management team has redesigned many of its projects and sold off the projects that were non-core to its strategy.”
And in a prepared statement, Wayne Farnsworth, Woodside’s general counsel through the reorganization and recapitalization, says that the first step in Woodside’s recovery was for the board and executive team to “right the ship” operationally and structurally, and “to build a new business strategy consistent with the dramatic changes that had occurred in the nation’s housing and home mortgage market.”