LV home builder sold to Florida firm

Jennifer Shubinski

Friday, Feb. 7, 2003 | 11:10 a.m.

A Florida-based home building company announced today that it bought Las Vegas-based Trophy Homes Inc. for about $36 million and that it obtained the rights to about 1,000 future home sites in the Las Vegas Valley.

The $36 million cash acquisition of Trophy Homes also includes additional performance-based payments in the future, the assets of Trophy Homes and gives buyer Technical Olympic USA Inc. the rights to the 1,000 home sites.

The buyout of the 12-year-old company comes as no surprise, said Las Vegas industry analyst Dennis Smith, president of Home Builders Research.

"Many private builders have found it more profitable to sell than compete with the large public builders that are currently active in Las Vegas," he said.

Last year there were 61 recorded new home sales by Trophy Homes. That compares to the 2,959 recorded new home sales in Las Vegas by market leader KB Home.

Trophy Homes, founded in 1990 by Brent Phillips, sold a broad range of houses, from luxury to affordable homes.

"The opportunity to merge with a public company, that has a lot of strength and that is organizationally very strong, is a great compliment to the Las Vegas market," Phillips, president of Trophy Homes said.

Phillips will continue to lead the company in Las Vegas and his staff of 35 will be retained.

"It allows us to get down to home building and taking care of home owners," he said. "It's still us and we care about every home that we build."

Officials with Technical Olympic USA, known as TOUSA, could not be reached for comment.

Antonio B. Mon, chief executive officer of Technical Olympic USA, said in a statement that Trophy Homes will retain its name.

"Trophy's reputation for integrity, and its demonstrated success delivering quality homes to Las Vegas home buyers over the past 12 years, is well recognized," Mon said in the statement.

The acquisition of Trophy Homes continues TOUSA's strategy of expanding within existing markets and selectively entering new markets, Mon said in the statement.

With 2002 revenue of $1.35 billion, Technical Olympic USA builds homes throughout Florida and Texas, as well as in northern Virginia, Phoenix, Denver and Baltimore. It provides services to its home buyers through its subsidiaries Preferred Home Mortgage Co. and Universal Land Title, Inc.

Mergers and acquisitions of privately held Las Vegas home building companies are a trend that has accelerated over the last couple years, said Monica Caruso, spokeswoman for the Southern Nevada Home Builders Association.

"There are numerous reasons, economies of scale, efficiency, and it has become a more difficult business environment for small and traditional home building companies," she said.

In the last four years, the number of home building companies in Las Vegas has decreased by 60, Caruso said.

Those companies either merged or were acquired by larger companies, went out of business or left the market, Caruso said.

In Las Vegas, there are about 120 home builders, of which 20 sold 360 or more homes last year, Caruso said.

The top 10 builders accounted for 53 percent of the market in 2002, up from 48 percent in 2001, Two builders, KB Home and Pulte/Del Webb, recorded 5,078 sales, or 23 percent of the market, according to Home Builders Research.

Smith said the mergers, in most cases, often don't affect the public.

"These are public companies -- large public companies have access to more cash, so sometimes operations can reflect that," he said.

Smith added that there are still several excellent private builders left in Las Vegas, including American West, which had 908 recorded new home sales last year, or 4 percent of the market.