Chris Jasinski and Ken McWilliams discuss the essential steps for buying and selling private home building companies in an article published in Pro Builder on November 18, 2022. Jasinski and McWilliams say that buying and selling a private home building company follows a similar format to mergers and acquisitions (M&A) in other industries, and the process can be broken down into three stages.

“Valuation and deal preparation in the M&A process takes about 45 days total,” Jasinski and McWilliams explain. “During that period, you as the seller have some work to do, such as providing detailed corporate and asset financial histories and projections. If you’ve hired an advisor, they will perform a financial valuation, then discuss with you the valuation range and terms you can expect to receive.”

Jasinski and McWilliams further discuss the marketing and bidding phase where bids are evaluated, pricing is negotiated and major deal terms are defined.

“We strongly push sellers to invest time and energy in the front-end deal prep stage so all of the diligence information is available and complete throughout the M&A process, which helps to facilitate a successful transaction for all parties in the deal.”

Read the full article on Pro Builder here.

In an article published in Pro Builder on November 16, 2022, authors Chris Jasinski and Ken McWilliams discuss the qualitative and quantitative factors that affect the price buyers are willing to pay when a private home builder sells their company.

“As a seller, you want to attract as many qualified bidders as possible,” Jasinski and McWilliams explain. “Multiple bidders create competitive tension that typically results in increased valuations and better transaction terms for you.”

Jasinski and McWilliams discuss some of the key attributes of businesses that will increase demand. Additionally, they mention that after evaluating qualitative aspects of business, a potential buyer will use numerous valuation methods to determine the price they are willing to pay.

“A builder’s land inventory is essential in determining the purchase price,” they add. “Finished lots (owned or optioned) are more desirable to buyers than raw land… and buyers pay a premium. Similarly, the majority of buyers prefer finished lot takedown deals to self-development deals.”

To read the full article on Pro Builder, please visit their website here.

In an article published on August 22, 2022 by ProBuilder magazine, JTW Advisors Managing Partner and Co-Founder Chris Jasinski outlines current market factors in the homebuilding industry that have resulted in a seller’s market for owners looking to sell their businesses. The article examines five current market trends in detail, specifically citing stagnant organic growth due to market conditions; expanded network of potential buyers, including foreign builders; the importance of company size to increase profits and efficiency; the need for expansion into new markets; and the consolidation of resources (including available land, employees, vendors and customers) in both primary and secondary markets. Jasinski emphasizes that private builders currently have a profitable window of opportunity to sell their business thanks to these market dynamics.

For the full article, please click here.

The Mecklenburg Times published an article on June 1st highlighting the acquisition of Executive Construction Homes, LLC by Lennar. JTW Advisors served as the financial advisor to Executive in its sale to Lennar.

Chris Jasinski, CEO & managing partner of JTW Advisors is quoted ”As the Southeast region continues to be a hot market for new development borne out of relocation trends, this deal speaks to the vision that leaders at both companies have to capitalize on growth opportunities and align their strengths to bring new homes to the growing Columbia market.”

For the full article, you may click here.

In an article published on April 15, 2022, by Mergers & Acquisitions online, JTW Advisors was noted as sell-side M&A advisor to Executive Construction Homes LLC. Lennar, a home builder, has acquired Executive Construction Homes. The transaction will enable Lennar to expand into the Columbia, S.C. market and allow Lennar to purchase Executive Construction Homes’ land pipeline totaling more than 3,300 lots.

Read the full article here.

In an article published on April 8, 2022, by Builder Online, Chris Jasinski, CEO and managing partner of JTW Advisors, views the transaction between Lennar and Executive Construction Homes as further proof of the current strength in the home building mergers and acquisitions market.

Lennar will expand its portfolio into the Columbia, South Carolina, market with the purchase of Executive Construction Homes’ finished lots and land pipeline totaling more than 3,300 lots. JTW Advisors served as the sell-side advisor to Executive Construction Homes in the sale to Lennar. This is JTW’s second mergers and acquisitions deal in less than three months. The company most recently advised Breland Homes on its sale to Lennar in the Huntsville, Alabama, and Pensacola, Florida, markets.

Read the full article here.

In an article published by The Builder’s Daily on April 8^th discussing broader trends in the homebuilder M&A market, Chris Jasinski is quoted discussing motivations for both buyers and sellers of private homebuilding companies.

“You’re seeing a period of heightened transaction activity, and now changing conditions mean that activity means more deals will be harvested,” says Jasinski. “The windows of opportunity to sell don’t exist – especially the ones open now – at every part of a housing cycle. So, for sellers – as for buyers, who are mostly angling for land where it’s constrained in a concentrated number of mostly Smile States markets – timing matters.”

Jasinski also discusses the rising attractiveness of secondary and tertiary markets.

“Migration patterns as they’ve begun to define themselves and continue to play out will start to widen a gap between broad national supply and demand, and specific metro, market, and submarket supply and demand, he says.  This is what makes Columbia, S.C. – which grew to about $1 billion in homebuilding sales revenue, and expanded by about $200 million in the past 24 months – a hot market now.”

For the full article, you may click here.

CEO Chris Jasinski recently shared his insights on public and foreign homebuilders expanding into previously overlooked secondary markets in response to high consumer demand for housing in small cities and the ongoing need for builders to grow. He notes that with builder targets of 10%-15% annual growth in revenue, profit and closings, builders are turning to smaller markets to feed that growth.

“Despite strong demand for new homes, meeting these projections is increasingly difficult due to a lack of available finished lots. That means big builders can’t simply ramp up production in another market to compensate for weather delays and other closings shortfalls elsewhere. Labor shortages and supply chain problems have exacerbated the situation, slowing cycle times and delaying closings. As a result, public and foreign builders are expanding into new markets through organic growth and M&A activity, searching for more closings, revenue and profit.”

In addition, the interest in secondary markets has been fueled by consumers seeking a lower cost of living, a trend that was rapidly accelerated during the pandemic when workplace flexibility allowed people to live and work anywhere. Further, smaller markets often mean less builder competition, looser terms for available land, and an easier regulatory environment. He cites the city of Columbia, S.C. as a stand-out example of a market benefitting from the trend.

“In 2018 there were only two public builders in Columbia, D.R. Horton and NVR, which held a mere 22% market share against private builders’ 78%. Later that year, Clayton purchased Mungo Homes, and LGI entered organically in 2019. In 2020, our firm advised Essex Homes, which held a 19% market share, on their sale to Stanley-Martin (Japan-based Daiwa House Group). By the end of 2020, public and foreign-owned builders were delivering 64% of Columbia’s new homes, and last year Pulte started acquiring land. As these big builders ramp up, we project their market share to increase. This trend will continue as many secondary markets still dominated by private builders are ripe to repeat Columbia’s experience.”

To read the full article, please click here.

The Builder’s Daily published an article on February 17^th discussing Breland Home’s sale to Lennar.

JTW Advisors served as an advisor in the transaction which closed in December 2021.

For the full article, you may click here.

On May 17, 2021, Minneapolis / St. Paul Business Journal published an article announcing that LGI Homes Inc. acquired R Home in a deal that closed on May 7, 2021.

As R Home is one of the largest locally owned single-family homebuilders in the Minneapolis / St. Paul area, LGI will expand its presence in the Twin Cities with more than 3,000 owned and controlled lots and homes.

“We saw an opportunity and wanted to take advantage while the timing was right. As we sought a buyer, JTW Advisors understood our priorities, found an excellent match in LGI and carried us through the acquisition process seamlessly,” said R Home Owner and CEO Kent Roessler.

For the full article, subscribers may click here.

In an article that was published on May 15, 2021, South Charlotte Weekly highlighted JTW Advisors’ involvement in the acquisition of Minneapolis / St. Paul-based R Home’s homebuilding and land development assets and operations by LGI Homes.

JTW Advisors served as the exclusive financial advisor to R Home in the sale that closed on May 7, 2021.

In addition to this acquisition, JTW Advisors recently served as the financial advisor to Essex Homes in their sale to Stanley Martin Communities, creating one of the top 25 builders in America.

For the full article, you may click here.

In an article published in Builder and Developer Magazine’s April Buyer’s Guide issue, Chris Jasinski discusses lessons learned for private builders and developers from the sale of Essex Homes to Stanley Martin Homes in late February, for which JTW Advisors served as the financial advisor to Essex Homes.

Chris Jasinski was quoted in Builder Magazine on February 27, 2020 discussing the recent acquisition of Essex Homes by Stanley-Martin Communities and the rising M&A trend in the homebuilding industry.

JTW Advisors advised Essex Homes in its sale to Stanley Martin, which closed on February 25, creating one of the top 25 builders in the U.S.

Jasinski believes the time-to-entitle raw Future Lots has become a critical motivator for active buyers in today’s homebuilding M&A market.

“You can’t buy raw land from Farmer Joe or Farmer Mary and get it into the finished developed pipeline for at least three years, for the most part these days,” says Jasinski. “This longer entitlement process–I think–is a factor motivating some of the M&A dynamics we’re seeing.”

For the full article, you may click here.