IN A FLURRY OF EXPANSION ACTIVITY, Hovnanian Enterprises made back-to-back acquisitions in the beginning of March, announcing the purchase of Altamonte Springs, Fla.-based Cambridge Homes on March 1, and following that up the very next day with the acquisition of all the communities and operations of Lombard, Ill.-based Town & Country Homes in a joint venture agreement with Blackstone Real Estate Advisors.
Hovnanian representatives speculate that the undisclosed amount spent in the Town & Country cash deal is the largest private home builder acquisition in history. “Town & Country is a great fit for our company,” says president and CEO Ara Hovnanian. “It provides a complementary geographic presence and product diversity to our current markets.”
These latest purchases add much heft to the Hovnanian stable—principally, it provides the company with a strong starting position in the Chicago housing market, the country's sixth largest according to 2003 home starts. But there's even more for the money: According to Hovnanian, Town & Country controls significant land positions in three of the Top 50 home building markets, including areas of Florida and Minneapolis. Ranked 52 in 2004 on the Builder 100, the company is predicting delivery of nearly 2,000 units in calendar year 2005. As of year-end 2004, Town & Country owned or controlled approximately 9,600 lots and had 1,153 homes in contract backlog.
The holdings of both Town & Country and Cambridge also will immediately create a stronger Hovnanian presence in several areas of Florida. As a leading builder in the central Florida market, Cambridge delivered 599 homes in fiscal year 2004, and the company owns or controls approximately 3,600 lots throughout the Orlando area. Town & Country gives Hovnanian leverage into West Palm Beach, Boca Raton, and Ft. Lauderdale.
Executives at both companies—Co-CEOs Michael Ryan and Thomas Ryan at Town & Country and CEO William Orosz at Cambridge—will remain with Hovnanian.