by Luisa Beltran
April 15, 2005

Warburg Pincus said Thursday, April 14, it has provided a $50 million equity commitment to Wall Homes, a startup home construction company, for a majority stake.

The transaction closed April 1, the day Arlington, Texas-based Wall Homes began operations. Founded by Steve Wall, the company will offer homes to first-time and second-time, move-up buyers in the Dallas-Fort Worth area.

Wall, the company's chief executive, left Choice Homes, where he was CEO, in January to begin the enterprise. Darris McClure, Choice's chief financial officer, also left to join Wall as CFO, Steve Wall said Thursday.

"Its something I've always wanted to do," Wall said. "At the end of last year, I made the decision because I felt it was time to do it."

Michelle Johnson, of M. Johnson & Associates, advised Wall Homes, while Craig Adams and Chris Schmitt of Baker Botts LLP provided counsel.

Stanton Eigenbrodt of Glast, Phillips & Murray PC was legal adviser to Steve Wall.

Warburg Pincus used no banker; Steven Seidman and Debra Cotter of Willkie Farr & Gallagher LLP were counsel.

The New York-based private equity firm has invested in other home builders, including $16 million it put in M.J. Brock, which was sold to Calabasas, Calif.-based Ryland Group Inc. in 1986. In 1991, Warburg helped found Pacific Greystone Corp. when it a provided an $85 million investment. In 1997, Greystone was merged into Lennar Corp., a Miami-based homebuilder.

"Management is key in these transactions," said Reuben Leibowitz, a Warburg managing director. "Wall is a really top-notch manager, and he took a very strong CFO [McClure] with him."

Talks between the companies began in February, said Wall, who believes that fundamentals for the homebuilding sector will remain strong for the next 10 to 15 years.

For the past 30 years, the Texas market has experienced a high level of immigration, he said. "Many of those people are becoming homebuyers," Wall said. "And the echo boomers - children of the baby boomers - are coming of age to buy homes."