First Homes scooped up
Local powerhouse builder, First Homes Builders, was acquired by Hovnanian Enterprises,Inc. (NYSE - HOV) the nation's eighth largest builder. The acquisition was all cash and the purchase price was undisclosed. Hovnanian is publicly traded and currently has backlogged orders for over 11,000 homes.
Hovnanian expects the acquisition to add about 5 cents to earnings in fiscal 2006. Fred Hermann, president, and Bruce Robb, chief operating officer of First Home Builders, will remain with Hovnanian following the acquisition.
It is tough to predict the effect that this transaction will have on the local home building market. You do have to wonder if a highly scrutinized public company will remain interested in building low-margin entry-level housing. Over time I expect to see the Hovnanian product to move up market, particularly in Cape Coral where almost all lots are pushing six figures.
Hovnanian Buys Florida Homebuilder [Forbes]