(NYSE:UCP) (“UCP”), a San Jose, California-based homebuilder and land developer, today announced its planned entry into the Charlotte, Raleigh, Myrtle Beach and Nashville markets through an agreement to acquire all or substantially all of the assets of Citizens Homes, Inc. (“Citizens”). Citizens is a privately held homebuilder with operations in select growth markets in the Southeast. The purchase price, estimated to be approximately $15 million, is based on the total assets of Citizens at the closing of the acquisition, less cash and cash equivalents, and less certain assumed trade payables. In addition, Citizens is eligible to receive earnout payments from UCP of up to $6 million in the aggregate based on performance over the next five years. The acquisition, which is expected to close during the second quarter of 2014, will expand UCP’s geographic presence and advance its long-term growth strategy.
Founded in 2009, Citizens builds homes for a variety of lifestyles and budgets, including entry-level, as well as first- and second-time move-up homebuyers. Citizens is led by a proven management team with considerable homebuilding experience and deep local knowledge and relationships. Following the acquisition, Citizens will operate under the Benchmark Communities name, UCP’s wholly-owned homebuilding platform.
For the year ended December 31,
2013, Citizens delivered 170 homes, generating revenue of approximately $37.3 million. As of December 31, 2013, Citizens’ land portfolio consisted of approximately 589 owned and controlled lots.
“This transaction is strategic and is expected to be accretive. Further, Citizens’ deep local presence will significantly advance UCP’s strategy of expanding its geographic footprint in housing markets that boast strong underlying fundamentals, including favorable employment trends and rapidly expanding populations,” said Dustin Bogue, President and Chief Executive Officer of UCP. “With this acquisition, UCP will gain a scalable platform and a proven management team that will support UCP’s entry into a number of highly attractive Southeast markets. UCP believes that adding these assets and management team to the proven UCP platform will be a catalyst for sustained growth in the coming years.”