United Homes Group (UHG) will explore selling the company, as it struggles to find its way as a public builder in a challenging market. It’s also replacing its CEO, the third person to hold the role since it went public in 2023.
The company’s board of directors has appointed a special committee comprised of independent directors and initiated a review of strategic alternatives, including a sale of the company, a sale of assets, and a refinancing of existing indebtedness, among others.
“We believe that now is the appropriate time to evaluate a range of potential strategic alternatives,” executive chairman Michael Nieri said.
The company was on a roll when it went public. Its stock surged 63% on its opening day as it promised to focus on attainable homes in Georgia, North Carolina, and South Carolina. Those same shares are down more than 75% since that initial public offering.
There were signs of trouble during the company’s last conference call, when it warned its margins were stubbornly “depressed” at 16%. It blamed its inventory of spec homes, which required heavy incentives to sell. The company stated it was shifting its focus away from spec homes, opting instead for presold homes, which offer higher margins.
United Homes reported an $18.2 million profit, which included a fair value adjustment of $21.2 million, on revenue of $87 million. It closed 252 homes, down from 311 the previous year. It had $86.9 million in liquidity and cash on hand, as well as available funds on its line of credit, as of the first quarter.
“With presold homes and newly refreshed products expected to make up a higher percentage of our closings, we are optimistic about the trajectory of our margins,” outgoing interim CEO Jamie Pirrello told investors.
Pirrello will be replaced by Jack Micenko, who previously served as the company’s president and will continue to serve as a member of the board of directors. Micenko has over 20 years of experience in equity and capital markets, with a focus on the residential real estate and mortgage finance sectors. Prior to joining UHG as president, Micenko was a managing director at BTIG, where he led the firm’s housing investment banking practice.
“His leadership of the company during these early years of being a public company has been invaluable, and with his extensive background in residential housing finance, capital markets, and mergers and acquisitions, Jack is well-qualified to lead our company during this time,” said Robert Dozier, vice chairman of the company’s board of directors.
The special committee of the board of directors has engaged Vestra Advisors as its financial adviser in connection with the review and has engaged Paul, Weiss, Rifkind, Wharton & Garrison as its legal adviser.
