Almost to the day, one year after Standard Pacific Homes announced it picked up 3,000 lots and the home building operations of Florida-based regional powerhouse Centerline Homes, StanPac has struck again, landing a higher-end, Austin, Tx.-based two-generation home builder with a solid reputation and a need for growth capital.
Standard Pacific announced Friday via a press statement the acquisition:
Standard Pacific Corp. (NYSE: SPF) announced the acquisition of the homebuilding operations of Austin, Texas builder Streetman Homes. The acquisition strengthens Standard Pacific's move-up position in Austin, giving the Company control of approximately 850 additional homesites in this market. The acquisition includes approximately 10 current and future communities, of which 5 are actively selling. Scott Stowell, Standard Pacific's Chief Executive Officer, stated that, "This exciting acquisition bolsters our growth strategy by increasing our land supply, community count and our target move-up position in the important Austin, Texas market. Streetman Homes has clearly earned its reputation as a high quality, move-up home builder with an emphasis on strong product execution and customer service which complements our existing operations while providing us with a number of communities in sought-after locations."
The paragraph above contains all the fact Standard Pacific revealed about the deal, and we'll be tracking back with the principals in the next couple of days to get more data points and perspective.
The transaction follows suit with a number of recent public-private, and private-private home builder merger and acquisitions deals. The primary motivation on the part of sellers is the timely need for capital to grow opportunistically in a lending and capital environment that has offered only the scantest bank-level financing for the kind and magnitude of acquisition and development privately-held home builders need. This need is especially keen as battles for access to submarket lot pipelines heats up in a lumpy, highly-selective A,B,C, and D lot competitive arena.
In this environment, private builders have little choice if they want to compete, except to sell to a public, attempt to secure an operating role in the divisional structure, and continue working to sell homes to customers.
Motivating the acquirers is a similar driver, namely the need to pipeline building lots, subdivisions, and tracts that represent incremental volume gains, the opportunity to accelerate "pace," in the form of units-sold-per-community-per-month, and the ability to bring on new "stores," that will sustain momentum and pricing.
For Standard Pacific, which has secured a market position above-the-fray of entry level players just below the Toll Brothers luxury tier, Streetman's ASP and land positions represent a good positioning fit.
StanPac already has leadership in the Austin market, and it will be interesting to see how the division leadership takes shape in light of the purchase of a company where young Randy Streetman has followed so effectively in his father James' footsteps.
Austin Division President John Bohnen commented, "Streetman Homes has a great reputation in the Austin marketplace and shares Standard Pacific Homes' core values of excellence and integrity. Adding Streetman Homes' experienced homebuilding operators and approximately 850 owned or controlled homesites to Standard Pacific's already strong Austin presence will allow us to grow our business while continuing to provide a well-built home and superior customer experience."
Learn more about markets featured in this article: Austin, TX.