Fort Lauderdale, FL August 19--Levitt Corp., parent of the company that built Levittown developments for U.S. soldiers returning from World War II, wants to acquire other home builders to expand its geographic reach.
Levitt aims to buy one to two companies a year and plans to pay for them using cash or stock.
"The goal is to expand our business. We are looking for acquisitions," Alan Levan, chairman and chief executive officer of Levitt, said Thursday in an interview with The Associated Press. The company, he said, "is designing itself to be a national homebuilder."
Levan said the initial acquisitions likely will be private home builders, many of them family-run businesses, but Levitt's chief executive said his firm plans to eventually buy other publicly-traded business.
"We would not look at public companies until 2008 or 2009," Levan said, adding that Levitt has engaged Wall Street investment banking firms for advice on its purchases. Levan said the private companies Levitt hopes to buy likely will cost $25 million to $50 million.
Last year, Levitt bought privately-owned Bowden Homes, a Memphis, Tenn.-based company. Levan said Bowden was able to triple the amount of homes it built annually largely because Levitt was able provide the builder with a steady source of financing for expenses like land purchases.
The company's Levitt and Sons in 1947 began building 17,400 singe family residences on New York's Long Island. Other master-planned communities were started up by the builder in Pennsylvania and New Jersey in the following decade.
Soldiers returning from the war in Europe and Japan could buy the homes for $7,500. Today, some of these homes are sold for about $350,000, according to Levan.
Levitt now builds communities for what it calls active adults, those 55 years and older who are typically planning for retirement but not ready to actually retire. The company builds these gated communities, sells the homes and then passes management of the communities on to their residents.
The average price of a home in these active adult communities is $250,000.
While Levitt is based in Florida and has largely a Southeast U.S. presence, the company is looking to expand its presence.
"People think of Florida as a place for retirement," Levan said. But, he said, "most people who retire, retire 50 miles from where they live. (So) every market is an opportunity."
According to the National Association of Homebuilders, there are over 100,000 home builder establishments in the U.S. There are only 29 publicly-held home builders, according to the industry trade group.
