Red Bank, NJ, April 17, 2006-- Hovnanian Enterprises announced today that it acquired CraftBuilt Homes, a privately held homebuilder, headquartered in Bluffton, South Carolina, for an undisclosed purchase price paid in cash. The acquisition expands Hovnanian's operations into the coastal markets of South Carolina and Georgia.
In its 2005 fiscal year, CraftBuilt Homes delivered 220 homes with revenue of approximately $42 million. CraftBuilt Homes currently has approximately 100 homes in contract backlog, with a sales value of $22 million and owns or controls approximately 2,800 lots throughout its markets.
CraftBuilt Homes designs, markets and sells single family detached homes. Due to its close proximity to Hilton Head, CraftBuilt Homes focuses on first-time, move-up, empty-nester and retiree homebuyers.
"We are pleased to welcome John Cardamone and his talented team to our operations," commented Ara Hovnanian, president and chief executive officer of Hovnanian Enterprises, Inc. "CraftBuilt Homes has an excellent reputation of building high-quality homes in traditional neighborhood settings and has a strong track record of financial performance. John and his team maintain a focus on return on capital and have built reliable homes for more than 20 years and we look forward to building many more homes with them over the next 20 years."
John Cardamone, founder and president of CraftBuilt Homes, stated, "Our combination with Hovnanian provides CraftBuilt Homes with the capital to expand our operations throughout the southeast coast. Our strong cultural fit provides us with confidence that we will continue to provide excellent career opportunities for our associates and most importantly continue to deliver the best possible homes to our customers." John Cardamone and Tim Franks, vice president operations, will remain with Hovnanian following the acquisition. CraftBuilt Homes was represented by BB&T Capital Markets in the transaction.
Hovnanian will not be booking any goodwill in conjunction with the transaction. Further, after taking into account the effects of the acquisition, the Company expects to be within its targeted ratio of 50% net debt to capitalization at its fiscal year end.
