Homebuilders have a great opportunity to benefit from a merger or acquisition if they have an open mind.

1. Big
Builder
Benefits
of
Mergers
&
Acquisi5ons
Tony
L.
Callahan
MBA,
CPSM,
CSCP,
CIRM,
CPIM,
C.P.M.,
A.P.P.,
MCIPS
This
slide
and
its
contents
are
the
intellectual
property
of
the
Callahan
Consul5ng
group,
LLC,
and
not
to
be
used
without
the
wriEen
permission
of
CCG.

2. Price
Transparency
• Open
access
to
detailed
cost
informa5on
from
the
acquired/merged
builder
– Yields
benefits
as
no
one
has
the
lowest
cost
in
everything;
even
a
smaller
builder
may
have
beEer
costs
on
select
categories
– Knowledge
of
these
opportuni5es
will
help
the
acquiring
builder
focus
their
efforts

3. Economies
of
Scale
• Volume
increases
lead
to
– Na5onal
agreement
improvement
– Regional
agreement
improvement
– Local
agreement
improvement
• A
builder
with
even
the
slightest
overlap
(with
the
merged
or
acquired
builder)
in
a
market
should
be
able
to
gain
purchasing
efficiencies
from
suppliers
and
trades
at
the
local
level
as
more
consistent
work
will
help
them
be
more
efficient.

4. Knowledge
• With
any
acquisi5on
comes
knowledge
of
a
different
and
perhaps
beEer
way
of
doing
something
• The
acquirer
or
the
builder
being
acquired
will
benefit
from
the
intel
they
learn
from
each
other
(if
the
acquirer
is
open
to
changing
the
way
they
currently
do
business)

5. Land
Posi5on
• The
combined
company
will
have
more
lots
• More
rela5onships
that
lead
to
more
land
opportuni5es
This
slide
and
its
contents
are
the
intellectual
property
of
the
Callahan
Consul5ng
group,
LLC,
and
not
to
be
used
without
the
wriEen
permission
of
CCG.

6. Resources
• BeEer
leverage
human
resources
• More
access
to
capital
• BeEer
leverage
fixed
expenses
This
slide
and
its
contents
are
the
intellectual
property
of
the
Callahan
Consul5ng
group,
LLC,
and
not
to
be
used
without
the
wriEen
permission
of
CCG.

7. Summary
• To
realize
the
full
benefits
of
an
acquisi5on
or
merger
the
builder
must
be
open
to
the
opportunity
before
them
• Extensive
comparisons
at
a
cost
code
level
on
comparable
homes
or
uni5zed
pricing
should
be
done
• A
comparison
of
trade
and
supplier
performance
metrics,
capabili5es
and
builder
costs
should
be
made

8. Summary
cont.
• A
willingness
to
change
to
suppliers
and
trades
(currently
serving
one
of
the
builders
but
not
both)
who
can
beEer
serve
the
new
and
larger
builder
will
be
needed
• An
open
mind
in
looking
at
different
ways
of
doing
business
will
enable
a
builder
to
improve
their
best
prac5ces
and
capture
more
benefits
of
the
acquisi5on/merger

9. Tony
L.
Callahan,
MBA,
CPSM,
CSCP,
CIRM,
CPIM,
C.P.M.,
A.P.P.,
MCIPS
President,
CEO
TonyC@CallahanCG.com
www.CallahanConsul5ngGroup.com
770-­‐715-­‐5036
This
slide
and
its
contents
are
the
intellectual
property
of
the
Callahan
Consul5ng
group,
LLC,
and
not
to
be
used
without
the
wriEen
permission
of
CCG.