Dominion Homes announced Wednesday that it has completed the merger transaction that was approved by its shareholders at a special meeting on May 30, 2008.
The company's new principal equity owners are an investment group comprised of Silver Point Capital, L.P. and Angelo Gordon & Co, L.P., Dominion's primary lenders, as well as BRC Properties Inc., which is controlled by Dominion chairman and CEO Douglas G. Borror.
"Through this transaction, we have significantly strengthened Dominion's balance sheet and positioned the company as a platform on which to grow both internally and through acquisitions," said Borror said in a statement. "The company will now look to leverage its presence in its core home building markets of Ohio, Kentucky, and Indiana and enter new markets. Our post-merger capital structure and the strong capital base of our supportive investors position Dominion as one of the strongest builders in its core markets."
Dominion, which will maintain its corporate office in Dublin, Ohio, will continue to be led by Borror and William G. Cornely, COO. The builder employs approximately 200 team members.
According to the statement, "Dominion begins its new operation as a private company, in full compliance with the terms and covenants of its credit facilities. It has been capitalized by a new investor group with substantial financial resources." It was noted that a balance of minimal third-party debt remains.
The company has been struggling since 2005. Not only had Dominion gone long on owned land in its primary Columbus, Ohio, market during a run-up in 2003 and 2004, but it was also facing a public relations crisis related to unethical sales and mortgage loan practices, documented violations, and unusually high foreclosure rates.
By early 2006, the Borror family had brought in a turnaround team of president and COO Jeffrey Croft, a former Pulte regional executive, and CFO William Cornely. But improved results never materialized, and as the broader market began to turn, the pressures associated with a tenuous debt load became even more intense.
The company posted net losses during each quarter in 2006, and by November of that year, hedge funds Field Point and Silver Oak Capital had purchased 73% of the company's bank debt.
Net losses continued during each quarter in 2007. By year's end, Dominion's board relieved Croft of his duties and reallocated Cornely from his position as CFO to become COO.
In January, Dominion announced the deconstruction of its publicly-held status and confirmed that it had entered into a buyout and merger agreement.
On March 20, the company received a "determination letter" from the NASDAQ Stock Market regarding a violation of compliance. Specifically, the company's stock, as of Dec. 17, had not maintained a minimum market value of publicly held shares of $5,000,000 over the previous 30 consecutive trading days as required for continued inclusion. It was given until March 17 to regain compliance, but failed to do so.
Though Dominion had a right to request a hearing before a NASDAQ Listing Qualification Panel, the company stated in a release that it had no plan to pursue an appeal from delisting.
According to the previously released terms of the merger agreement, Dominion shareholders--other than the buyout group--received $0.65 in cash for each common share. The stock, which was traded over-the-counter under the symbol DHOM, peaked at $39.34 on March 5, 2004.