The deal, which makes Tri Pointe one of the 10 largest homebuilders in the U.S., gives Weyerhaeuser investors a controlling stake in Tri Pointe of 80.5%.
Irvine, Calif.-based Tri Pointe said the acquisition, expected to close by the end of the second quarter, includes roughly 27,000 new lots in high-growth, lot-constrained markets, more than half of which are in Southern California.
The rest will be spread out between Washington D.C., Las Vegas, Washington State, Richmond and Puget Sound.
"This transaction uniquely positions us to build on our established momentum, expand our footprint and capitalize on new growth opportunities,” TRI Pointe CEO Doug Bauer said in a statement.
Under the terms of the deal, Weyerhaeuser will distribute ownership of the unit, Weyerhaeuser Real Estate, to its shareholders via 130 million shares and pay $700 million in cash. WRECO will then merge with a subsidiary of TRI Pointe, giving Weyerhaeuser investors roughly 80.5% ownership of TRI Pointe shares.
Bauer will continue to serve as CEO under the combined entity, while Tom Mitchell and Mike Grubbs will maintain their positions as chief financial officer and chief operating officer, respectively.
TRI Pointe is receiving financial guidance from Deutsche Bank Securities (DB).
Shares of Tri Pointe climbed 12% to $17.22 in recent trade, while those of Weyerhaeuser edged up slightly to $30.49.