Taylor Morrison: From TPG LBO to Berkshire's First Abel-Era Deal

The headline is the exit

On May 31, 2026, Berkshire Hathaway announced an agreement to acquire Taylor Morrison Home Corporation for $72.50 per share in cash — roughly $6.8 billion of equity and about $8.5 billion of enterprise value, a 24% premium to the prior Friday's $58.50 close. The deal closed on July 24, 2026, and TMHC was delisted from the NYSE the same day. Greg Abel framed the transaction as his first major deal as Berkshire's CEO, and the logic is straightforward once you squint: combined with Berkshire's existing Clayton Properties Group — the holding company for 15 regional site-built builders — the Taylor Morrison platform now anchors a top-four US homebuilder by closings, roughly 23,000 homes across 21 states and 52 markets in 2025. Sheryl Palmer, Taylor Morrison's CEO since 2007, stays on to run the combined operation and lead the integration with Clayton. Curt VanHyfte remains CFO. Erik Heuser stays as chief corporate operations officer. On the organisational chart, almost nothing moved.

That's the single most important fact about Taylor Morrison in 2026. Everything else is context for how the company got there — and whether the Berkshire umbrella changes the underwriting case for the business Palmer has been running for 18-plus years.

How we got from Taylor Woodrow to Omaha

The lineage is longer than the ticker. Morrison Homes was founded in Seattle in 1905; Taylor Woodrow has roots in the UK back to 1921. George Wimpey bought Morrison in 1984 and operated it as a US arm, and on July 6, 2007, Taylor Woodrow and George Wimpey merged to form Taylor Wimpey plc. The combined US operation was rebranded Taylor Morrison by 2008 — a 2007 founding date that is really a corporate re-labeling of two century-old builders.

The LBO came in July 2011, when Taylor Wimpey sold its US business to a TPG Capital, Oaktree Capital, and JH Investments consortium through TMM Holdings LP for roughly $1.3 billion. On April 9, 2013, the sponsors took it public, upsizing the IPO to 28.6 million shares at $22 — the top of the range, raising ~$526 million. At that point Taylor Morrison was the sixth-largest US builder with $1.44 billion of 2012 revenue and 4,014 closings. TPG and Oaktree were fully out through secondaries by 2016. That's worth sitting with: the private-equity sponsors monetised early, and public shareholders who held from the 2013 IPO through the July 2026 Berkshire takeout clipped roughly a 13% share-price CAGR over 13 years ($22 to $72.45). A respectable return, not a spectacular one — and one that only crystallised because a strategic buyer showed up at the end.

Between IPO and takeout, Palmer ran a textbook consolidation playbook. June 2018: AV Homes acquired for $963 million at $21.50 per share, adding active-adult exposure. November 2019 announcement, February 6, 2020 close: William Lyon Homes acquired for about $2.5 billion ($950 million equity; $2.50 in cash and 0.800 TMHC shares per WLH share), picking up Nevada, Arizona, and California scale. The Yardly build-to-rent brand was launched and expanded 2020-2022, initially through a Christopher Todd Communities licence that was wound down in 2023 in favour of in-house development. By FY2024 the company closed 12,896 homes on $8.17 billion of revenue — effectively double the 2016 footprint — and was running at a run-rate that made it a logical tuck-in for Berkshire's housing platform.

The business Berkshire bought

Taylor Morrison operates in roughly 21 markets across 12 states, with a clear Sunbelt tilt: Phoenix, Tampa, Houston, Dallas, Atlanta, Charlotte, Jacksonville, Sarasota, Las Vegas, Orlando, Denver, Austin, Nashville, Raleigh, plus Northern and Southern California. The company reported 341 active selling communities and roughly 3,000 employees in 2025.

The multi-brand portfolio is the real strategic signature. The flagship Taylor Morrison brand covers move-up and entry-level single-family. Darling Homes Collection, a Texas premium line acquired pre-IPO in 2012, runs upmarket. Esplanade is the resort-style active-adult 55+ brand — one of the very few scaled in-house 55+ franchises outside PulteGroup's Del Webb — and was extended west to Temecula and Lincoln in 2020. Yardly is the proprietary build-to-rent brand, now active in roughly 10 markets across NC, TX, FL, and Phoenix, with the company monetising through asset sales (the Yardly Paradisi Phoenix community sold for $55 million via Northmarq in 2025). Captive financial services — Taylor Morrison Home Funding (an FHA Full Eagle that sells most originations), Inspired Title in nine states, and Taylor Morrison Insurance Services — round out the stack and capture the mortgage/title/insurance attach.

On land, management has spent years shifting to what it calls a "capital-efficient" mix. At Q3 2025, 60% of 84,564 lots were off balance sheet. The anchor is an $850 million joint venture with Värde Partners (40% TMHC / 60% Värde) that land-banks lots for future takedowns. Land spend was $2.4 billion in 2024 with 2025 guided to $2.3 billion. Of year-end 2024 owned/controlled lots, 49% were 2024-vintage, 16% 2023-vintage, and 14% 2022-vintage — a relatively fresh book, which matters when valuing the land when underwriting risk.

The numbers Berkshire was underwriting

FY2024 was a clean rebound year. Revenue of $8.17 billion (+10.1%), home-closings revenue of $7.76 billion (+8.3%), 12,896 closings (+12.2%), ASP of $601,000 (-3.5% as mix and incentives pulled price down), net orders of 12,248 (+13.1%), home-closings gross margin of 24.4% GAAP / 24.5% adjusted (+50 bps), pre-tax margin of 14.2% GAAP / 14.9% adjusted, net income of $883 million / $8.27 diluted EPS ($931 million / $8.72 adjusted). SG&A ran 9.9% of home-closings revenue. Cancellations fell to 9.5% from 12.1% in 2023. Year-end backlog was 4,742 homes and $3.19 billion at a $673K ASP — down 10.3% in units and 12.4% in dollars, foreshadowing what 2025 would look like. The company bought back $348 million / 5.6 million shares, ran net debt-to-capital at 20.0%, kept $1.4 billion of liquidity, and reported book value per share of roughly $56.

The historical trajectory tells the rate-cycle story cleanly: revenue of $4.90B / 9,964 closings in 2019, $6.13B / 12,524 in 2020 (with William Lyon in since February), $7.50B / 13,699 in 2021 (peak volume), $8.22B / 12,647 at a $624K ASP in 2022 (peak ASP, rate shock), $7.42B / 11,495 in 2023 (trough), $8.17B / 12,896 in 2024 (rebound), and $7.76B home-closings / 12,997 closings in 2025 at roughly $595K ASP (margin compression, Berkshire takeout).

Q3 2025 showed where the pressure is: closings of 3,324 (-2.1%), home-closings revenue of $2.00 billion (-1.4%), ASP $602K, home-closings gross margin of 22.1% GAAP (a 270 bps y/y compression), monthly absorption of 2.4 (versus 2.8), and — most telling — cancellations at 15.4% of gross orders and 10.1% of beginning backlog, up sharply from 9.3% and 4.7% a year earlier. Backlog was 3,605 homes / $2.34 billion. This is what the 30-year mortgage parked near 7% through much of 2025 looks like in a Sunbelt builder's statements: rate-buydown incentives chewing through margin and buyers walking away from signed contracts.

Say the uncomfortable thing

Three things are worth stating plainly. First, consensus at delisting was a "Hold" with an average price target of $66.75 — meaning sell-side analysts saw $72.50 as full, not generous. Berkshire paid approximately 1.3x book value and roughly 10x forward earnings, which is cheap by historical builder multiples but not for a business whose Q3 2025 gross margin had compressed 270 bps and whose cancellation rate had jumped 610 bps. On the public tape, Taylor Morrison was exited at a fair price rather than a windfall.

Second, TPG and Oaktree — the sponsors who did the 2011 LBO — had been fully out by 2016. Public shareholders carried the business from 2013 through 2026 and earned the exit premium. Christopher Yip (RET Ventures, ex-TPG) lingered on the board as a reminder of the TPG lineage, but the headline is that 13 years of public ownership produced a 13% share-price CAGR that only reached its endpoint because a strategic buyer underwrote the terminal value. Palmer deserves credit for persistently compounding; the market itself, less so.

Third, Taylor Morrison carries one of the strongest B2B trust franchises in American homebuilding — ranked #1 by Lifestory Research as "America's Most Trusted Home Builder" for 11 consecutive years (2015 through 2026), plus Newsweek Most Responsible Companies four years running, WSJ Best Managed Companies, and Forbes America's Most Trusted. The consumer side looks different. The Better Business Bureau profile for the Scottsdale HQ shows a 1.11/5 average across 139 reviews, with complaints clustering around unresolved warranty tickets, slow post-close service, construction defects (water intrusion, HVAC, plumbing debris), deposit-refund disputes, and non-disparagement agreements imposed after contract cancellations. WFTV's Action-9 ran a warranty investigation. ComplaintsBoard tracks a similar pattern. The brand accolades and the warranty-experience reviews describe different companies — and both, importantly, are true. For Berkshire, underwriting Taylor Morrison means inheriting both.

Competitive position

US single-family starts run roughly 1 million units a year. The top-10 public builders took 43.6% of closings in 2025 (down slightly from 44.8%), and the top-5 took 34.8% (NAHB EyeOnHousing, July 2026). D.R. Horton led with 87,168 closings for 12.8% share, followed by Lennar at 12.2%, PulteGroup at 4.4%, NVR at 3.2%, and Meritage at 2.2%. Taylor Morrison sat #5-6 by revenue but roughly #7-8 by closings — meaningful scale, not top-tier scale. Combined with Clayton Properties Group under Berkshire, the platform jumps to top-four.

Esplanade competes head-on with Del Webb; few other public builders operate an active-adult brand with Esplanade's resort-amenity depth. Yardly puts TMHC among the earliest public-builder BTR franchises, into a segment where trailing-four-quarter BTR starts of roughly 68,000 are up 42% year on year.

Outlook: well positioned or at risk?

Well-positioned — now that Berkshire's balance sheet is behind it, with Sheryl Palmer still running the business, the Clayton integration creating a top-four US homebuilder platform, a multi-brand portfolio that meaningfully differentiates on 55+ and BTR, and 11 straight years of trust-brand equity — but rate sensitivity, margin compression, Sunbelt insurance-market dislocation, and a consumer-warranty gap that looks nothing like the B2B accolades remain the real risks under the Berkshire umbrella.

Rate sensitivity is the near-term swing factor: mortgage rates near 7% through 2025 pushed cancellations to 15.4% and compressed gross margins to 22.1% in Q3. Geographic concentration — FL, AZ, TX, CA — overlaps with the markets facing the sharpest insurance-market dislocation (particularly Florida and California), hurricane and flood exposure, and in some cases water scarcity. The $850 million Värde JV is efficient on capital but concentrates land-banking equity. The BTR cycle slowed as institutional SFR capital pulled back in 2024, pushing Yardly toward asset sales. Labor shortages, tariff pass-through on steel, aluminum, and lumber (flagged in the FY24 10-K), and cyber risk round out the standing concerns. Consolidation is now a realised event rather than an option: Taylor Morrison was acquired, not an acquirer.

For Berkshire, the underwrite is more about durability than growth — a proven operator running a capital-efficient land model inside a book that will now be funded on Berkshire terms. Taylor Morrison the public company is done. Taylor Morrison the operating business just acquired the best balance sheet in American finance.