Century Communities, the 13-year-old builder that last year was fourth largest in Denver with 288 closings, on Monday completed its initial public offering of 12,075,000 shares of common stock, through which it raised $241.5 million. That dollar amount includes proceeds from the sale of an additional 1,575,000 shares that Century’s placement agent, FBR Capital Markets & Co., had options to purchase.
With this offering, which a company official says has been in the works since the beginning of this year, Century, based in Greenwood Village, Colo., becomes the latest private builder to offer ownership to the public. So far this year, TRI Pointe Homes, Taylor Morrison, and Wm. Lyon Homes have gone public, and several other builders could be contemplating stock offerings, too.
Brothers Dale and Robert Francescon, Century’s co-CEOs, remain the largest shareholders in the company. Through a spokesman, Robert Francescon tells Builder that the timing of the IPO coincides with “housing fundamentals that are moving in the right direction for us.”
In a prepared statement, Dale Francescon said his company plans to use the proceeds from the sale “primarily” for land acquisition and development. The company also stated that it intends to grow its market share in Colorado, where its construction activity stretches from Fort Collins to Colorado Springs. A few days before it completed its IPO, Century purchased PulteGroup's remaining land assets in the Denver metro. That deal is comprised of three communities: Southshore in Aurora, Harvest Meadows in Commerce City, and Ash Meadows in Thornton. The IPO will also help finance Century's planned expansion into “selected additional markets in the western United States.” Mike Davidson, Century’s vice president of marketing, says that the builder isn’t ready yet to identify which markets or states it might expand into, “but we definitely have some strong targets.”
Davidson says the company, which generated $115 million in home building revenue last year, expects to close “just over” 500 homes in 2013, which would be 48% higher than its 337 closings in 2012, which placed Century 96th on the Builder 100 national ranking.
Single-family homes accounted for less than one-third of Century’s closings last year. But the company is back building single-family homes again in several of its 16 communities, after a stint during the housing recession when it focused on attached product. Last month, Century began selling homes at Candelas, a sustainable master-planned community in Arvada, Colo., where the builder offers solar energy packages that include 20-year leased systems with power upgrades available.
John Caulfield is senior editor for Builder magazine.