HORSHAM, Pa. (AP) -- Toll Brothers is buying the homebuilding business of Shapell Industries for about $1.6 billion in a move aimed at strengthening its position in California.

The announcement comes three days after Tri Pointe Homes said that it would combine with Weyerhaeuser Co.'s homebuilding business in a deal valued at about $2.7 billion. The transactions are the latest efforts being made by homebuilders to bolster their businesses in growing markets while the housing recovery continues.

Toll said that it plans to finance part of the Shapell acquisition with net proceeds from a public stock offering.

Privately held Shapell, founded in 1955, builds luxury homes in the coastal markets of Northern and Southern California. The Shapell family will remain owners of its retail, commercial and multifamily businesses.

Luxury homebuilder Toll Brothers said that the deal gives it Shapell's land portfolio, which includes parcels in wealthy, high-growth markets such as metro Los Angeles, Orange County, Carlsbad and the San Francisco Bay area. Toll Brothers entered the California market in 1994. It has produced approximately $6.5 billion in revenue from more than 90 communities in the state.

Toll Brothers anticipates acquiring about 5,200 lots from Shapell, which would bring its total lots owned and controlled in California to approximately 9,200.

"Shapell's current portfolio dovetails perfectly with our own California footprint and luxury brand, and adds meaningfully to our presence in premier coastal locations in California," Toll Brothers CEO Douglas C. Yearley Jr. said in a statement.

Toll Brothers plans to sell about $500 million worth of land after the buyout closes.

The company announced it is starting a public offering of approximately 6.3 million shares of its common stock. It expects to use the offering's net proceeds to finance part of the proposed Shapell deal. The homebuilder is giving the underwriters a 30-day option to buy up to an additional 937,500 shares.

Toll Brothers could raise about $204.9 million from the offering based on its Wednesday closing price of $32.52.

The Shapell acquisition is targeted to close in the first quarter of 2014. It is expected to add to Toll Brothers' earnings in the first year excluding transaction costs.

The company also said Thursday that it expects fourth-quarter revenue of approximately $1.04 billion and full-year revenue of about $2.67 billion. Analysts surveyed by FactSet predict fourth-quarter revenue of $930.2 million and full-year revenue of $2.55 billion.

Toll Brothers expects to report its final fourth-quarter and full-year financial results in early December.