By Iris Richmond. Atlantic Expansion
Standard Pacific Corp. is acquiring -- again. On June 5, the Irvine, Calif.-based company entered into a letter of intent to buy Westfield Homes USA for a proposed price of $109 million. Based in Tampa, Fla., Westfield Homes delivered 1,155 homes in 2001 (exclusive of Illinois operations, which it sold to Chicago-based Cambridge Homes, a subsidiary of D.R. Horton, last November), and had revenues of $186 million. Its homes in the Carolinas range from $100,000 to $150,000, while operations in Tampa target move-up buyers and range from $150,000 to $250,000.
Standard Pacific plans to pay $59 million in cash and stock and assume about $50 million in debt to buy Westfield's Florida, North Carolina, and South Carolina operations, says its CFO Andrew Parnes, who expects due diligence to be completed by August and says that management teams, led by Westfield president Roger Gatewood, will continue to operate as is.
Further expanding its presence in Florida, David Weekley Homes entered the coastal city of Fort Myers by acquiring a majority of assets of Coastland Homes. The move gives the Houston-based builder operations in four of the Sunshine State's cities, including Tampa, Orlando, and Jacksonville.
Weekley shares an undisclosed percentage of the company with new minority owner O.J. Buigas, a local real estate veteran. To help promote the David Weekley product, the new owners retained the employees of Coastland, which brings a backlog of 55 lots. Weekley's area president Randy Braden expects the new outfit to close on 60 homes by year's end and then to increase production by 150 annually, with prices starting at $200,000.
Industry Movers and Shakers
Industry veteran Dom Cecere brings 28 years of experience in corporate finance to his new role as CFO and senior vice president of KB Home. Prior to joining, Cecere was a consultant for Gryphon Investors evaluating small cap companies for acquisition.
Pulte Homes announced the appointment of Richard J. Dugas as its COO, a position left vacant when Mark J. O'Brien assumed the role as president and CEO. Dugas will oversee all of Pulte's domestic home building operations, which span 43 markets. Pulte also named Bernard W. Reznicek to its board of directors.
After 10 years as COO, Frank Glankler becomes president of Forecast Homes, now a K. Hovnanian company. As well as being responsible for the overall performance, operations, and growth of the company, Glankler will serve on the board of directors of Forecast Mortgage. Both operations are in Rancho Cucamonga, Calif.
Colony Homes of Atlanta names Ron Peiffer, former president of the company's Raleigh, N.C., division, to the position of CEO. Peiffer's promotion allows owner Tom Bradbury to focus full-time as board chairman.
After a newspaper broke the story, Miami-based Lennar Corp. officially unveiled its intention to buy an undisclosed number of lots and options from Pacific Century Homes, a privately held builder in Temecula, Calif. Neither company would comment on whether the deal was for land only.
Pacific Century is the Inland Empire's largest home builder, with 1,338 closed homes last year. If combined, the companies would make Lennar the second-largest home builder in Southern California with an 8.62 percent share of the market, trailing D.R. Horton's 9.00 percent, according to data compiled by MarketPoint.
Lennar issued a Memorandum of Understanding outlining its intentions. Under the agreement, Lennar will review Pacific Century's business and operations. No transaction will occur until Lennar approves the results of its review, and definitive agreements are reached.
Both companies confirmed that negotiations are underway, but SEC regulations prevented representatives from commenting on their progress.
Local Leaders 2001
Riverside/San Bernardino, Calif. Market
|Builder||Sales in Units|
|Pacific Century Homes||1,338|
|Century Village Homes||572|
|William Lyon Homes||460|
Source: BUILDER Magazine
Temecula Giant: Pacific Century Homes moved from sixth place in 2000 to first in 2001 for total sales in units, capturing 6 percent of the Riverside/San Bernardino, Calif., market. Lennar is seventh with 2.4 percent.
Out of Sight
To TeleFlage Corp., a company in San Diego that provides wireless telecommunications screening, cell phones are not luxuries, but necessities. However, to keep from cluttering the landscape with cell antennas, the firm sells products that camouflage the eyesores. Using composite materials, TeleFlage creates architectural features that include rock, shingles, brick, stucco, and wood siding. The company says it can apply these materials to chimneys, flag poles, existing signage, clocks towers, and steeples. Visit www.teleflage.com for more details.
Ready to Buy
Meritage Corp. is making no secret about its intention to acquire another builder. As announced in its May earning statement, getting an acquisition done in 2002 is a top priority for the Scottsdale, Ariz.- based company. On May 1, the company filed a $300 million universal shelf registration with the SEC.
"We filed it to be ready to go quickly should we need to issue a security in connection with a potential acquisition," says CFO Larry Seay. "There is nothing imminent, but we're out there looking real hard to find somebody."
Forecast Homes and Premier Homes, both based in Rancho Cucamonga, Calif., are the first two designated "California Green Builders" by the state's Building Industry Association (CBIA) for building projects designed to meet the following standards:
- Build homes that are at least 15 percent more energy efficient than required by the state;
- Divert at least 50 percent of jobsite waste from landfills;
- Reduce water consumption by 25 percent by incorporating water-saving features.
On top of the environmental benefits, CBIA hopes the designation will provide a marketing advantage to compliant builders, which, if successful, should prompt more builders to look at the program. Any builder may participate, and CBIA expects more recipients to come.
Published in BIG BUILDER Magazine, July 2002