In a strategic move, Hayden Homes announced Tuesday it closed on a purchase agreement to buy out the home building side of its biggest competitor, Copper Basin Construction, for about $50 million.
The acquisition, which includes about 1,200 residential lots across Washington and Idaho, will make Redmond, Ore.-based Hayden Homes more of a force to be reckoned with in the Pacific Northwest.
The acquisition will be made in phases, Hayden Homes CEO Dennis Murphy says. The company closed on 100 finished lots on Friday and immediately began working on 30 homes.
“We are going to close on another 150 this summer,” he says.
The remaining lots will close over the next six to eight years. The lots are included in 10 communities across the Washington state markets of Spokane and Pullman and in North Idaho where Hayden, Idaho-based Copper Basin Construction had a strong holding. The acquisition will make the company the biggest builder in the Pacific Northwest, according to a company news release.
“We saw it as a perfect situation to buy one of our bigger competitors and also end up with a pretty substantial lot supply,” Murphy says.
The purchase is fueling instantaneous growth for the company. Closings are expected to increase by about 15 or 20%, according to Murphy. And that’s exactly what he was looking for. The company plans to triple its business by 2020, according to the news release.
“There are two ways to grow and that’s either organically or through strategic acquisitions,” he says. “This was our first strategic move toward growth and we have a couple others out there that we are going to be looking at.”
Copper Basin Construction will continue to operate on the land development side of the business and will retain its multifamily operations.