San Jose, Calif.-based home builder UCP Inc. is acquiring Citizen Homes Inc. in a move that is expected to nearly double the West Coast builder’s size.
UCP will pay $15 million in cash for Citizens, and an additional $6 million on performance benchmarks met over the next five years, The Wall Street Journal reports.
UCP’s current base is in California and Washington state. In 2013, the builder sold 196 homes at an average price of $370,000.
Citizen Homes, which builds homes in Charlotte and Raleigh, N.C.; Myrtle Beach, S.C.; and Nashville, Tenn. — sold 170 homes last year at a price range between the high $100,000s and high $300,000s.
“This particular acquisition provided us an affordable platform with a deep foothold in those markets,” says UCP President and Chief Executive Dustin Bogue. “Those markets have a lot of room to run.”
The merger comes at a time when several other builders have been joining forces. In February, Toll Brothers Inc. purchased Shapell Industries, a California developer, for $1.6 billion. TRI Pointe Homes Inc. is in the midst of acquiring the home-building operations of Weyerhaeuser Co. in a $2.7 billion deal. Also, among smaller builders, AV Homes Inc. in Scottsdale, Ariz., is acquiring Florida builder Royal Oak Homes in a $65 million deal.
Source: “Home Builder UCP to Buy Citizens Homes,” The Wall Street Journal (March 26, 2014)