When Stanley Martin Homes president Steven Alloy went out looking for a home builder partner to grow the Reston, Va.–based company beyond the Washington, D.C., market he hoped to find somebody compatible. He never dreamt he would find a small doppelganger in Piedmont Realty & Construction in Charlottesville, Va.
“We were shocked” at the similarities between the two companies, Alloy said. “It was just the perfect match.”
The two companies merged yesterday, Feb. 11, after courting since November. “We are both entrepreneurs, and in the home building business you just get things done,” said Alloy.
Stanley Martin sells homes to first and second move-up buyers, and so does Piedmont. Both focus on better-located communities, and they each pay a lot of attention to the architecture of their homes and customer satisfaction, aiming to provide the best customer experience. Maybe even more importantly, their principles, policies, and leadership styles synced.
“Drew [Holzwarth, president of Piedmont] said, ‘You guys must have bugged my office or something. Everything you do, we do,’” Alloy recalled.
Maybe one of the most unusual syncs between the companies was that they both grew during the downturn. In fact, Piedmont Realty & Construction was born in 2009 in the middle of the recession. Stanley Martin took orders for 463 homes last year, and Piedmont sold 80.
While Stanley Martin was interested in moving beyond Washington, D.C., Piedmont was at the point in its growth curve where it needed to invest in software for more robust accounting and operational systems, and it needed more capital to grow. “So, rather than spending a year building all this infrastructure, he can get that all from Stanley Martin from day one, and he can do what he does best—grow his business,” says Alloy. “It’s hard to imagine a better partnership.”
As part of the deal Holzwarth became an executive at Stanley Martin, responsible for what the company is calling its Southern Region, including Charlottesville, Va. But post-merger the partners are planning to expand further south into Richmond, Va., and the Raleigh-Durham, N.C., area.
“We are excited to be merging with Stanley Martin Homes,” said Holzwarth in the announcement. “We have complementary product design and a similar commitment to taking care of our customers. The merger provides us with the systems and financial resources to expand our product selection and geographic reach, and we are looking forward to continuing the success we have achieved in the market.”
No Piedmont employees are expected to lose their jobs in the merger since there was no back office staff. “It’s not only that nobody loses their jobs, it’s actually that we have been hiring,” says Alloy. Stanley Martin’s employment roll grew by more than 50 people in 2012, an increase of more than 27%. A lot of those new workers went to the company’s in-house mortgage company that did a billion dollars’ worth of business last year, Alloy said.
For now, the companies will continue to operate under their existing names, says Alloy.
Both have strong name recognition and branding in their markets. “It seemed least confusing to keep things in place,” says Alloy. “Over time we’ll see how that shifts and how it works out. Over the next year we need to figure out what’s the best answer.”
Teresa Burney is a senior editor for Builder magazine.