Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today
announced it had entered into an agreement to acquire Venture
Homes, a leading private homebuilder in Atlanta, for approximately
$65 million.
Venture Homes was founded by CEO and President Robert White Sr.
in 1984, and has delivered more than 6,000 homes during its 34 year
history. Over the last 12 months, Venture Homes generated $69.9
million of homebuilding revenue from 277 closings with an average
selling price of $252.2 thousand.
The Venture assets to be acquired by Beazer include more than
1,000 lots located in 9 active communities and 18 future
communities principally serving first time and first move-up
homebuyers. The transaction also includes substantial construction
work in process as well as 51 homes in backlog. The unique benefits
of the transaction include:
- Similar customer focus.
Venture’s customer positioning is well-aligned with Beazer’s
commitment to provide extraordinary value at an affordable price to
homebuyers. The Company will be able to provide its Mortgage
Choice, Choice Plan and Energy Efficiency advantages to a larger
group of home buyers
- Increased scale in an existing
market. On a combined basis, Beazer and Venture have closed
nearly 500 homes in Atlanta over the last 12 months, which ranks
among the top 10 builders in the market. This added scale will
create opportunities with, and for, trade partners, current and
prospective employees and land sellers
- Compelling land acquisition leading
to earnings and ROA growth. The transaction represents a rare
opportunity to acquire a portfolio of performing communities and
future land assets at an attractive price. This results in a faster
improvement in both earnings and return on assets than would be
possible solely from land purchases
- No increase in debt from
transaction. The transaction was funded from available cash and
resulted in no increase in debt
“This acquisition allows us to accelerate our growth in Atlanta,
a highly desirable market supported by robust job growth, solid
affordability and favorable supply dynamics,” said Allan Merrill,
President and CEO of Beazer Homes. “In addition to adding new and
future communities, we are pleased to welcome our new colleagues
who will enable us to pursue further growth in the Atlanta market
in the years ahead.”
Venture Homes Founder, CEO and President, Robert White Sr.
stated, “While we received proposals from a number of other
builders, Beazer Homes’ culture and commitment to delivering both a
quality experience for buyers and opportunities for employees most
closely aligned with our values. We’re excited about the
opportunities that this combination creates for both our customers
and our employees.”
The parties expect the transaction to close promptly upon the
satisfaction of customary closing conditions.
Preliminary Fiscal 2018 Third Quarter Results
In connection with the Venture acquisition, Beazer also
pre-released the following preliminary results for its fiscal 2018
third quarter:
- Homebuilding revenue of $507.0 million,
provided by 1,391 home closings and an average selling price of
$364.5 thousand
- New home orders of 1,450, based on an
average community count of 157 and sales per community per month of
3.1
- Dollar value of backlog of $920.7
million, resulting from 2,371 homes in backlog and with an average
price of $388.3 thousand
The Company will announce its final results for the fiscal 2018
third quarter when it issues its earnings release after market
close on July 26, 2018, followed by a 5 P.M. (ET) conference
call.
Fiscal 2018 and 2019 Outlook
In addition, the Company stated today that based on the
continued strength of its year-to-date results and the favorable
supply and demand environment for new homes in its markets, Beazer
Homes is providing the following guidance for the remainder of
fiscal 2018:
- Achievement of the Company’s
long-stated “2B-10” goals, including both its revenue and Adjusted
EBITDA targets
- Retirement of the Company’s 2019 senior
notes, which have a remaining principal balance of $96.4
million
Further, in light of the positive factors noted above and the
contributions anticipated from the newly acquired Venture
communities, the Company also announced today its expectations with
respect to fiscal 2019:
- Earnings per share above $2.50
- Double-digit growth in Adjusted
EBITDA
- Further reductions in outstanding
debt
The Company will provide additional commentary on these
expectations during its third quarter earnings call.
About Beazer Homes
Headquartered in Atlanta, Beazer Homes is one of the country’s
largest single-family homebuilders. The Company’s homes meet or
exceed the benchmark for energy-efficient home construction as
established by ENERGY STAR® and are designed with Choice Plans to
meet the personal preferences and lifestyles of its buyers. In
addition, the Company is committed to providing a range of
preferred lender choices to facilitate transparent competition
between lenders and enhanced customer service. The Company offers
homes in Arizona, California, Delaware, Florida, Georgia, Indiana,
Maryland, Nevada, North Carolina, South Carolina, Tennessee, Texas
and Virginia. Beazer Homes is listed on the New York Stock Exchange
under the ticker symbol “BZH.” For more info visit Beazer.com, or
check out Beazer on Facebook and Twitter.
Forward-Looking Statements
This press release contains forward-looking statements,
including expectations regarding the impact of the Venture Homes
acquisition on our operating results, guidance concerning the
remainder of fiscal 2018 and expectations regarding our performance
in fiscal 2019. These forward-looking statements represent our
expectations or beliefs concerning future events, and it is
possible that the results described in this press release will not
be achieved. These forward-looking statements are subject to risks,
uncertainties and other factors, many of which are outside of our
control, that could cause actual results to differ materially from
the results discussed in the forward-looking statements, including,
among other things: (i) economic changes nationally or in local
markets, changes in consumer confidence, declines in employment
levels, inflation or increases in the quantity and decreases in the
price of new homes and resale homes on the market; (ii) the
cyclical nature of the homebuilding industry and a potential
deterioration in homebuilding industry conditions; (iii) factors
affecting margins, such as decreased land values underlying land
option agreements, increased land development costs on communities
under development or delays or difficulties in implementing
initiatives to reduce our production and overhead cost structure;
(iv) the availability and cost of land and the risks associated
with the future value of our inventory, such as additional asset
impairment charges or writedowns; (v) shortages of or increased
prices for labor, land or raw materials used in housing production,
and the level of quality and craftsmanship provided by our
subcontractors; (vi) estimates related to homes to be delivered in
the future (backlog) are imprecise, as they are subject to various
cancellation risks that cannot be fully controlled; (vii) a
substantial increase in mortgage interest rates, increased
disruption in the availability of mortgage financing, the recent
change in tax laws regarding the deductibility of mortgage interest
for tax purposes or an increased number of foreclosures; (viii)
government actions, policies, programs and regulations directed at
or affecting the housing market (including the Tax Cuts and Jobs
Act, the Dodd-Frank Act and the tax benefits associated with
purchasing and owning a home); (ix) changes in existing tax laws or
enacted corporate income tax rates, including pursuant to the Tax
Cuts and Jobs Act; (x) our cost of and ability to access capital,
due to factors such as limitations in the capital markets or
adverse credit market conditions, and otherwise meet our ongoing
liquidity needs, including the impact of any downgrades of our
credit ratings or reductions in our tangible net worth or liquidity
levels; (xi) our ability to reduce our outstanding indebtedness and
to comply with covenants in our debt agreements or satisfy such
obligations through repayment or refinancing; (xii) increased
competition or delays in reacting to changing consumer preferences
in home design; (xiii) weather conditions or other related events
that could result in delays in land development or home
construction, increase our costs or decrease demand in the impacted
areas; (xiv) estimates related to the potential recoverability of
our deferred tax assets; (xv) potential delays or increased costs
in obtaining necessary permits as a result of changes to, or
complying with, laws, regulations or governmental policies, and
possible penalties for failure to comply with such laws,
regulations or governmental policies, including those related to
the environment; (xvi) the results of litigation or government
proceedings and fulfillment of any related obligations; (xvii) the
impact of construction defect and home warranty claims, including
water intrusion issues in Florida; (xviii) the cost and
availability of insurance and surety bonds, as well as the
sufficiency of these instruments to cover potential losses
incurred; (xix) the performance of our unconsolidated entities and
our unconsolidated entity partners; (xx) the impact of information
technology failures or data security breaches; (xxi) terrorist
acts, natural disasters, acts of war or other factors over which
the Company has little or no control; (xxii) the impact on
homebuilding in key markets of governmental regulations limiting
the availability of water; (xxiii) the failure to close the
acquisition of Venture Homes or realize the anticipated benefits of
the transaction within the time period currently expected (or at
all) for any reason; (xxiv) the risk that the integration of
Venture Homes’ operations into our own will be materially delayed
or will be more costly or difficult than expected; or (xxv) the
effect of the announcement of the acquisition on our business or
the business of Venture Homes.
Any forward-looking statement speaks only as of the date on
which such statement is made and, except as required by law, we
undertake no obligation to update any forward-looking statement to
reflect events or circumstances after the date on which such
statement is made or to reflect the occurrence of unanticipated
events. New factors that may impact the accuracy of the
forward-looking statements in this release emerge from
time-to-time, and it is not possible for management to predict all
such factors. Please refer to the risk factors described in our
most recent annual report on Form 10-K for a more detailed
discussion of risks that may affect our business.
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version on businesswire.com: https://www.businesswire.com/news/home/20180710005239/en/
Beazer Homes USA, Inc.David I. Goldberg, 770-829-3700Vice
President, Treasurer and Investor
Relationsinvestor.relations@beazer.com
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