The holiday weekend brought rumblings that another of home building's scores of potential mergers and acquisitions deals is moving toward closing, this one pairing two fast-growing private enterprises, one in search of footprint and operational expansion, and the other on the hunt for capital.
Word is Denver-based and Mountain Real Estate Capital-backed Oakwood Homes, which late last year expanded from its comfort zone in Colorado's Front Range as the state's most productive private home builder into Omaha, is now about to make Utah part of its expanding footprint.
Oakwood, which was the 2013 Builder 100's 93-ranked builder with $90 million and 352 closings in 2012, is said to be buying Centerville, UT-based Henry Walker Homes, which operates in Northern and Souther Utah as well as the Loveland and Longmont markets in Colorado.
There's a lot more to report on this, but it's time to review my "Ten Bold Predictions for 2014: the 'Fend for Yourself' Year" post. Here's what it says about mergers and acquisitions:
ROBUST MERGERS & ACQUISITIONS: Need and need will both collide and converge here, fueling M&A partly because there's an over-capacity in the over-all mechanisms for managing new home construction, and an under-supply of capital resources at the local store level. So, in a "fend for yourself" year, principals of privately-held companies will have to look hard at whether there may be diminishing returns on their current portfolios of owned land assets and access to new lots, and ponder whether they might just now get the maximum return on those assets because there are bigger well-capitalized companies still on the make for new communities and visible new incremental revenue. Our bold prediction: 15 to 20 small to medium-sized acquisitions in the next 12 months, and one-to-three mega-deals that combine companies with multi-regional holdings.
We'll have more perspective and specific insight into the Oakwood/Henry Walker deal as soon as we can get that timezone on the phone today. Later.
Learn more about markets featured in this article: Omaha, NE, Denver, CO.