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What happened

Shares of WCI Communities (NYSE:WCIC) surged more than 40% by 11:15 a.m. EDT on Thursday after the Florida luxury homebuilder agreed to be acquired by Lennar (NYSE:LEN), the nation's second-largest homebuilder.

So what

Lennar agreed to purchase WCI Communities in a cash-and-stock deal valuing the company at $23.50 per share or $809 million in totality. It also contains a "go-shop" clause giving WCI Communities 35 days to secure an offer better than the 37% premium offered by Lennar.

In acquiring WCI Communities, Lennar gains access to a vast portfolio of land in Florida's largest and fastest-growing coastal communities, boosting its presence in the Sunshine State. WCI Communities currently controls 14,200 home sites for move-up, active adult, and second-home buyers. Over the past year, the company sold 1,118 homes at an average sales price of $444,000. That will bolster both numbers for Lennar, which sold 6,758 homes last quarter for an average selling price of $362,000.

Now what

Lennar is already one of the largest homebuilders in Florida, so the acquisition of WCI Communities will increase its exposure to that key growth market. CEO Stuart Miller sees WCI Communities' land portfolio "dovetailing perfectly with our own Florida footprint." Furthermore, Miller believes that the transaction will create significant value for shareholders as it accelerates the company's growth and diversification.