Arlington-based homebuilder D.R. Horton and Austin-based real estate company Forestar Group brought their “A” game to the bargaining table and agreed to a merger valued at $560 million. In the definitive agreement, Horton is acquiring 75 percent of Forestar’s outstanding stock.

The deal is a win-win for all involved. Aligning with D.R. Horton, the nation’s largest homebuilder, will put Forestar on the fast-track toward becoming a leading land developer in the U.S. while providing access to the capital it needs to expand into the larger market. D.R. Horton likewise plans to pay market prices for purchasing a sizeable portion of home lots that Forestar develops. 

For D.R. Horton, it can build quality new homes while Forestar develops the land. Since the Great Recession, third-party developers have been faced with such tight lending options that D.R. Horton and other builders were forced to develop many of their own lots. The merger with Forestar, however, enables D.R. Horton to step away from the land development side of the business and minimize its lot supply to only a two or three-year inventory.

Despite the leading roles D.R. Horton and Forestar play in the North Texas building boom, D.R. Horton anticipates closing on about 45,000 new homes nationwide this fiscal year. Forestar’s holdings include approximately 50 residential and mixed-used projects that are under development in 10 states.

Pending approval from Forestar’s shareholders and meeting closing conditions, both parties project closing the acquisition by year-end.