KB Home and Taylor Morrison see great opportunity to grow their business in the Jacksonville market with their recent acquisitions of local builders. After acquiring Landon Homes in July, KB Home expects big growth in the market, CEO Jeffrey Mezger said in the Los Angeles-based homebuilder’s quarterly conference call.
Taylor Morrison Home Corp., gained entry to the Jacksonville market last week with its completion of the acquisition of AV Homes. “We are currently the fourth-largest builder in this market based on deliveries, and our position will be enhanced in 2019 and beyond with this acquisition,” said KB's Mezger. “Our local team is moving quickly, having completed the rebranding to KB Home and the introduction of our product in all but one active community that we acquired,” he said. Mezger said the assets of Jacksonville-based Landon gave KB “2,100 lots that we now own or control across 17 communities, eight of which are open today and nine communities which will open over the next 18 to 21 months.” When the deal was announced in July, KB said it acquired 700 lots from Landon. A KB spokeswoman said last week the 2,100 lots Mezger cited include future opportunities resulting from the Landon deal. In response to analysts’ questions, Mezger explained why KB targeted Landon. “If you look at Jacksonville, it’s a great story in that their product was aligned with ours. We like our floor plans better, but the footages and the price points were similar, and the geographic complement of where they were open versus where we were open was also very good,” he said. Mezger said KB already had “a great business in Jacksonville” and it was quickly able to “plug and play” its business into the Landon communities. “Right now, we’re fourth in Jacksonville. We don’t want to be fourth. We’d rather be first, second, third and this will help us to get there. So, it’s really a pretty quick hit deal at a very reasonable price.” AV Homes, headquartered in Scottsdale, Arizona, as is Taylor Morrison, operated in five communities but four of them overlapped with existing Taylor Morrison operations. The $963 million acquisition gives Taylor Morrison entry into the Jacksonville market. In a memo to employees in late September, AV Homes CEO Roger Cregg said Jacksonville employees will be able to continue working in their current offices because Taylor Morrison doesn’t have operations in the area. He also tried to assure employees that the deal will be positive for them. “As we near close, Taylor Morrison is planning ‘Day One’ celebrations for our arrival — something I believe is a true testament to the type of organization we will be joining. Taylor Morrison is known for their people-first focus, and I know they are delighted to be welcoming us into the special culture they have created,” Cregg said.
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