Buy-ins, Mergers & Acquisitions
Mergers and acquisitions arranged during the recent resurgence in housing have generally been, and continue to be, purchases of 100% of the assets of a company. While uncommon, in a few transactions, the purchaser acquired the stock of partners equity rather than the assets of the company. However, a new type of buyer/investor has recently emerged that are interested in acquisitions of a partial interest in a homebuilding company, also called a “buy-in.” The investor or buyer might acquire 51% of a builder, recapitalize the business, and provide some capital specifically to acquire distressed assets. The builder contributes 100% of its assets to the new venture and shares in the profits going forward. The transaction will provide for multiple exit strategies, allowing either party to exercise an option to acquire the other’s interest, or for the parties to join together in selling the revitalized operation to a third party.
Hazeloop, Walsh & Associates is an industry leader in arranging and closing mergers & acquisitions for homebuilders and has experience with partial interest acquisitions as well. Our experience in valuing homebuilding operations, assessing management teams, and structuring transactions has positioned HWAA as the go to firm for all types of merger & acquisition transactions.
Buyer or Investor Representations
HWAA has assisted numerous national and private homebuilding companies in planning their entry into new markets, or expansion of existing operations, through the merger/acquisition of qualified homebuilding companies with local expertise. This service is also applicable to investors seeking opportunities for direct investment in homebuilding.
The process may include:
- Identifying private homebuilding companies in client specified markets
- Winnowing the list to match the client’s criteria, including size in annual deliveries, product type, or price point
- Contacting local homebuilders on a confidential basis to gather information on product, pricing, etc.
- Visits to candidates’ operations to gather financial information, view product, and evaluate competitive position
- Discussions with local housing experts and brokers
- Prioritizing candidates
- Negotiations with candidates
- Managing the closing process
Valuations of Homebuilding Assets & Operations
HWAA is especially skilled in developing valuations of homebuilding operations, because we are regularly involved in structuring transactions in the housing sector. We can evaluate a company’s value in terms of current market realities and structures, recognizing that transactions completed in past years may no longer be representative.
Valuations can be useful in considering the sale or merger of a homebuilding business, but may also be used for estate planning and other planning purposes. When performing a valuation, one or more of our partners conduct an onsite visit over one or more days, learning about the operation, reviewing financials and visiting communities in order to identify factors affecting the value. Shortly after the visit, our clients receive an analysis detailing the valuation and approaches used in establishing the valuation, as well as any structuring details which would affect the valuation.
Divestitures of Divisions or Related Companies
Some homebuilding companies want to sell divisions, assets, or related entities which no longer fit with the company’s goals and strategies. Alternatively, divisions or companies may be sold in order to raise capital for pursuit of other opportunities.
HWAA assists in arranging the sale of divisions or related companies, utilizing its extensive contacts in the housing industry.
Profitability Analysis & Tune-up
Potential sellers can use this service to prepare their company for a future sale. Our experienced team can evaluate your organization and financial performance in comparison to others in the same or similar markets and offering similar products. We can identify areas within your operation that are the sources of slippage in profitability, and we can make specific recommendations for improvement. If required, we can assist in the implementation of revised procedures designed to eliminate the slippage.