Boston, MA 05/27/2014 (wallstreetpr) – D.R. Horton, Inc. (NYSE:DHI) acquired Crown Communities’ homebuilding operations of for ~$210 million of cash. The combination of two largest builders will increase the market shares as well as its geographic presence as Crown considers as the largest homebuilder in the Atlanta market and has a solid presence in Georgia, South Carolina, and eastern Alabama.
Advantage over Crown’s portfolio
Crown’s homebuilding assets include sales order backlog of 640 homes in inventory, 2,350 lots and sold ~420 homes. D.R. Horton also has the control over ~3,400 lots through option contracts. In 2013, Crown sold 1,540 homes at an average sales price of $244K, which includes an average size of 3,500 square feet.
D.R. Horton and the combination
D.R. Horton, Inc. (NYSE:DHI) becomes the largest homebuilder for 11 consecutive years and closed with ~25,712 homes in last 12 months ended March 31, 2014 and sales order backlog of 10,059 homes, valued at $2.8 billion. So, D.R. Horton’s total revenues for the 12 months were $7 billion with total assets of $9.4 billion and shareholder’s equity of $4.3 billion.
D.R. Horton has broad geographic presence currently operates in 79 markets across 27 states in the U.S. and offers a diversified range of products. The Company expects growth in local operating markets with the favorable conditions and gradual improvement in the housing market.
After the acquisition, Crown will operate as a separate division D.R. Horton. It will add Augusta and Spartanburg markets into its portfolio and strengthen the position in Greenville and Columbia region and create a strong growth platform in the Southeast market.
Final take
Solid balance sheet and strong backlogs will address the growing demand in the local markets. The addition of Crown’s home building business into its portfolio will further increase its revenue and profitability in coming periods.
