RED BANK, N.J., Aug. 11 /PRNewswire/ -- Hovnanian Enterprises, Inc.
(Amex: HOV), a leading national homebuilder, announced today that it has
acquired Matzel & Mumford, a privately held homebuilding company based in
Hazlet, N.J. As consideration, Hovnanian provided a combination of 1,083,454
shares of its Class A common stock and an undisclosed amount of cash.
Hovnanian expects the transaction to be modestly accretive to its earnings per
share in fiscal 1999 and 2000.
Matzel & Mumford designs, constructs, markets and sells new homes
throughout New Jersey. In the year ended December 31, 1998, it sold 287 homes
and generated total revenues of $117 million. It expects to deliver about 294
new homes, at an approximate average selling price of $365,000, and generate
total revenues of roughly $107 million in the year ending December 31, 1999.
By way of comparison, in fiscal 1998, Hovnanian delivered 2,530 homes in its
Northeast Region with an approximate average selling price of $235,000.
"This acquisition will further strengthen our dominant position in the New
Jersey marketplace," says Ara Hovnanian, President and Chief Executive
Officer. "In addition, this acquisition brings with it several key
advantages. Hovnanian is gaining an excellent management team, led by Roger
Mumford, who built Matzel & Mumford from scratch. Also the Matzel & Mumford
operation holds a substantial land position with approximately 2,500 lots in
great locations. Additionally, Matzel & Mumford has a solid quality
orientation, similar to our own, and a fine architectural product portfolio
that will compliment ours," notes Mr. Hovnanian.
Initially, Matzel & Mumford will become a division of Hovnanian, based in
Hazlet, N.J. and operate autonomously under its own name. Ultimately, Matzel
& Mumford's operations will be merged into Hovnanian's Northeast Region
"We are looking forward to joining forces with Hovnanian", says
Roger Mumford, President of Matzel & Mumford. "I have known Ara for years and
I have a great deal of respect for both Hovnanian Enterprises, Inc. and Ara
personally," states Mr. Mumford. Matzel & Mumford was represented in this
transaction by Ron Robichaud of Michael P. Kahn & Associates.
Mr. Hovnanian notes that the Matzel & Mumford acquisition is in addition
to present Company efforts to expand into at least one new geographic market
which Hovnanian does not presently serve. Hovnanian designs, constructs and
markets single-family homes, townhomes and condominiums in planned residential
communities in New Jersey, North Carolina, California, Pennsylvania, Virginia,
Maryland, New York and Florida in the United States, and in Poland. Hovnanian
is America's 14th-largest homebuilder, is headquartered in Red Bank, N.J. and
this year is celebrating its 40th Anniversary.
Note: All statements in this Press Release that are not historical facts
should be considered as "forward-looking statements" within the meaning of the
Private Securities Litigation Act of 1995. Such statements involve known and
unknown risks, uncertainties and other factors that may cause actual results
to differ materially. Such risks, uncertainties and other factors include,
but are not limited to, changes in general economic conditions, fluctuations
in interest rates, increases in raw materials and labor costs, levels of
competition and other factors described in detail in the Company's Form 10-K
for the year ended October 31, 1998.
SOURCE Hovnanian Enterprises, Inc.