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More homebuilder consolidation: Century Communities buys Wade Jurney Homes

Deal creates nation’s 10th largest homebuilder

The consolidation of the homebuilding industry continues.

Last week, Taylor Morrison announced that it is acquiring fellow homebuilder AV Homes in a deal valued at nearly $1 billion.

And last year was all about Lennar, which acquired WCI Communities for $963 million and bought CalAtlantic Group in a $9.3 billion deal that created the nation’s largest homebuilder.

Next up is Century Communities, which announced Friday that it is acquired the remaining 50% of Wade Jurney Homes in a deal that creates the nation’s 10th largest homebuilder.

Wade Jurney Homes is the country’s 35th largest builder and specializes in providing affordable homes in Florida, Georgia, Alabama, North Carolina, and South Carolina. Specifically, the company focuses on entry-level buyers with sales prices averaging $150,000.

The company operates a streamlined business model and sells its homes entirely online.

Going forward, the company will function as a wholly owned subsidiary of Century and will operate as a distinct brand under the Century umbrella while maintaining its existing business model.

“This transaction establishes Century as a top-10 U.S. homebuilder and represents another milestone for our company,” Dale Francescon, Century’s co-CEO said.

“Our partnership with Wade Jurney Homes has been extremely positive and allowed us to benefit from increasing demand for entry-level homes through a high-returning asset-light model and enhanced geographic exposure to one of the fastest growing regions of the country,” Francescon said. “Our return on investment has surpassed our expectation in each quarter since inception of the joint venture in 2016 and we are excited to build upon that positive momentum with full ownership of Wade Jurney Homes.”

The companies say that the transaction will be beneficial for all involved, allowing geographic expansion for both companies, increasing Century’s exposure to first-time buyers, and driving additional revenue via Century’s existing mortgage and title operations.

Under the agreement, Wade Jurney will continue as president of Wade Jurney Homes.

“I am excited to join Century, which has already contributed greatly to extending our track record as the fastest growing private U.S. homebuilder in each of the past three years,” Jurney said. “We have a scalable operating model and we believe the demand for homes at our price points remains strong. Together with Century we are already taking steps to execute the next chapter of our growth and we look forward to being the homebuilder of choice for entry level buyers in a growing number of attractive markets throughout the country.”

As of March 31, 2018, Wade Jurney Homes had approximately 5,810 owned and controlled lots and 1,189 homes in backlog, representing a value of $188.8 million.

In the last year, Wade Jurney closed 1,937 homes that generated $304.2 million in revenue.

“The coming together of the fastest growing public and private U.S. builders was a logical next step for our partnership,” Rob Francescon, Century’s co-CEO said.

“We are very pleased that Wade will continue in his current role as President of Wade Jurney Homes. With the strength of our capital resources, national scale and operating infrastructure, coupled with Wade’s operational expertise, we are now even better situated to expand the success of Wade Jurney Homes’ unique operating model into additional markets,” Francescon added.

“This geographic expansion includes the Midwest, Arizona and Texas, where we have already begun acquiring lots,” Francescon concluded. “We look forward to Wade Jurney Homes contributing to our earnings in 2018 and beyond.”

Financial terms of the deal were not disclosed.

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