Bloomfield Hills, MI, December 28, 2005—Number two U.S. homebuilder Pulte Homes said it sold its Mexico home-building operation to investors led by affiliates of Walton Street Capital, allowing the company to focus on its U.S. expansion.
Financial terms of the deal were not disclosed.
"As previously announced, we have been evaluating long-term strategic alternatives with regard to all of Pulte's international operations," Roger Cregg, Pulte chief financial officer, said in a statement.
"With the sale of our Mexico home-building operation, we have effectively exited our international business, allowing us to focus all our resources toward further expanding Pulte's share of the U.S. housing market," Cregg said.
In January Pulte sold its Argentina operations to Argentine company Grupo Farallon S.A.
Pulte Mexico, which began operations in 1994, was on track to sell more than 7,000 homes in 2005.
"They're going to pump some capital in it and try to make it work," said Sam Lieber, president of Alpine Mutual Funds.
Lieber said he sees large U.S. home builders playing at home, where they control about 25 percent of the new-home market, until they start pushing up against a share of 45 percent to 50 percent.
He expects U.S. builders to be active in South America and Mexico in about five years when mortgage markets develop.
"The public builders will say, 'Where are growth opportunities?' and they'll head offshore," Lieber said. "But then those markets will be more sophisticated."
Pulte said it would report the unit as discontinued operations in the company's fourth-quarter 2005 financial results.
