The two biggest builders in Madison, Wis., have decided to put nearly a half century of competition behind them to create a new company expected to be the largest home builder in the state.

That company is Veridian Homes, the result of an early June merger between Don Simon Homes and Midland Builders, two family-owned companies that have built in Madison and Dane counties, Wis., since the 1950s. Individually, they are smaller production builders, with 282 closings and $50 million in revenue for Midland last year and 275 closings and $68 million for Don Simon. Both have invested in doing traditional neighborhood design communities, building energy-efficient homes and serving the entry-level buyer.

"We've been on parallel paths for years," says Jeff Rosenberg, president of Midland Builders, a sentiment echoed by his new partner, David Simon, president of Don Simon Homes. Joining forces as Veridian Homes, Simon says, "will provide a stronger platform for growth in our marketplace."

Growth is definitely part of the Veridian plan. The newly formed company could soon become one of the country's largest 100 home builders, with 640 closings and $143 million in revenue projected for 2004.

The deal, which closed June 3 after months of talks, represents a new twist on consolidation in the home building industry. The merging of two smaller private companies is "very indicative of a trend that may be coming," says Nicholas Beare, a managing director with Matrix Capital Markets Group, an investment bank in Charlotte, N.C. "It's nice to see an alternative out there beyond just selling to the big public companies."