In 2013, Eagle Construction of Virginia founders Bud Ohly and Bryan Kornblau decided that 30 years was enough, despite being on the path to closing 304 homes.

When Markel Ventures, a subsidiary of Glen Allen, Va.-based insurer Markel Corp., came to the Eagle founders with an offer to buy the Glen Allen, Va.,-based builder, the duo decided that an influx of capital and elimination of risk was too enticing to pass up. So they sold the company they built from scratch, while continuing to run the operation.

“When I first got in [the business], a new deal was a new deal,” Ohly says. “You wanted it to work. But if it didn’t, it wasn’t any big deal. As it got to 2012, every deal could bring us down. So, I wanted to know how this story would end.”

Ohly and Kornblau got that answer by selling Eagle after other companies, including public builders, had approached them.

“We sold to an acquirer that allows us to run the company the way we’ve always done it, but gives us a lot of support to improve the way we do things,” he says.

Ohly’s story shows the complicated decisions facing many builders in the BUILDER Next 100 as they choose whether to expand or sell. With closings between 400 and 100, these private builders are often market leaders with rock-solid local reputations. In the active mergers-and-acquisitions climate, that makes them an appealing target for bigger builders. But if they want to expand, they may need to switch roles and become the acquirer.

An Acquisition Target?
For Darren Sutton, owner of Matthews, NC-based Bonterra Builders, age plays a role in deciding how to proceed with his company, which closed 294 homes in 2013.

“People talk to us a little bit [about selling],” he says. “I’m fairly young. I’m only 38. I haven’t really looked into it [selling] greatly. I’m not saying that it won’t happen, but it will have to be the right situation.”

As a former employee of a public builder, Sutton knows his platform may not be easily assimilated by a bigger competitor, especially the strategic plans, which he says are just “up in my head.”

“Most public homebuilders will look at our operation and it will probably scare the hell of them because I’ve got so many product lines,” he says. “We probably have over 100 lines that we build.”

Robert Goodall, president and owner of Goodall Homes in Gallatin, Tenn., which closed 318 homes in 2013, is content with where he’s at.

“When the nationals come in, one of their first options is buying a local builder,” he says. “Our name has been thrown out a bit. But we’re happy and content with great management team that we have.”

Making the Buy
After buying enough land during the downturn to keep him busy for a while, Goodall has no designs on buying competitors either. But for other BUILDER Next 100 companies, it's an option that could eventually push them into the BUILDER 100.

With the additional dry powder from Markel, Ohly can move from being the acquiree to the acquirer. He’s wants to expand into other areas of Virginia, outside of his home in Richmond, and is talking with a couple of builders right now.

“We will go into one other market and possibly two this year,” he says.

Fred Delibero’s company, Summit Custom Homes, is No. 1 in the Kansas City market with 180 closings in 2013. But he has his sights set on other areas, which could mean an acquisition or two.

“Down the road, would we like to be regional?,” says Delibero, Summit’s founder. [The answer is] probably yes, possibly 2015. That’s what we’re looking at right now.”

Sutton wants to expand into new markets, but says he isn’t considering doing that through acquisition.

“We’re going to look into expanding into another market. Right now, we’re based out of the Charlotte MSA,” he says. “We’re looking at another market within North or South Carolina for something that’s a good fit for us.”

Learn more about markets featured in this article: Richmond, VA.