Activity in the mergers and acquisitions market kicked off in 2023 with Gehan Homes’ acquisition of an 80% interest in Southern Impression Homes in January. After a quieter beginning to 2023, the pace of deals accelerated as the year progressed, concluding when New Home Co.—No. 81 on the 2023 Builder 100—acquired Hamilton Thomas Homes.
“While 2023 started off slowly, the mortgage lock-in effect resulted in sustained demand for new homes, and, as a result, the larger builders have been actively pursuing new market positions,” says Margaret Whelan, founder and CEO of Whelan Advisory.
D.R. Horton, the largest company on the 2023 Builder 100 list, expanded in the Gulf Coast region with the acquisition of Truland Homes in July. At the time of the acquisition, D.R. Horton announced plans to combine Truland's operations with its existing platforms in Baldwin County, Alabama, and northwest Florida.
While several builders expanded to new markets organically during the year, Landsea Homes continued its expansion via acquisitions with the purchase of assets and lot inventory of Richfield Homes in October. The deal marked the entrance into the Colorado market for Landsea Homes. At the time of the acquisition, Landsea chief operating officer Mike Forsum told BUILDER that expansion via acquisition allows the company to “take advantage of our skill set around entitlements and land development” and the company is “just beginning to scratch the surface in terms of the potential that we see in Colorado.” Since going public in 2021, Landsea Homes has acquired Vintage Estate Homes and Hanover Family Builders and relocated its headquarters to Texas from California.
Kentucky-based Fischer Homes—the 30th-ranked builder on the 2023 Builder 100 list—also expanded into a new market through acquisition when it acquired Florida-based Samuel Taylor Homes. Fischer has home building portfolios in Cincinnati; Louisville, Kentucky; Atlanta; Indianapolis; Columbus, Ohio; Dayton, Ohio; and St. Louis, and the purchase of Samuel Taylor Homes marked its expansion into the Sunshine State. CEO Tim McMahon said the expansion into Florida was "natural" for Fischer Homes given the state's population growth and the home builder's existing presence in the Southeast.
New public builder United Homes Group was busy in the M&A market in 2023, completing deals to acquire Herring Homes in Raleigh and Rosewood Communities in South Carolina.
“United Homes Group went public earlier this year and subsequently completed several acquisitions, including the purchase of Herring Homes in Raleigh, North Carolina,” says Whelan. “Smith Douglas Homes acquired Devon Street Homes in Houston, continuing the theme of regional builders accelerating their growth through targeted acquisitions.”
Whelan says another trend in the M&A market in 2023 was the strong interest from strategic Japanese buyers. In 2023, Gehan Homes (now known as Brightland Homes and backed by Japanese parent company Sumitomo Forestry), Woodside Homes (backed by Japanese parent company Sekisui House), and Trumark Homes (backed by Daiwa House) were active in the M&A market.
“Buyers have vast amounts of capital available and mandates to accelerate growth. Sellers appreciate the opportunity to take some chips off the table and, in many cases, remain with the buyer as part of a larger organization,” Whelan says of factors favorably contributing to M&A activity.
Whelan says following a busy 2023, she expects 2024 “to be another record year for M&A activity with both buyers and sellers well positioned to consummate successful transactions.”
