PodcastNational Housing Market Outlook

IPOs and Mergers & Acquisitions with Tony Avila

Dean Wehrli
Shelly Chen

Dean Wehrli

Shelly Chen

July 9, 2021

Patience and persistence: the common denominators between Ironman triathlons and mergers and acquisitions. Tony Avila, Co-Founder and Managing Principal of Encore Capital Management, knows this better than anyone. In this week’s New Home Insights podcast episode, we speak with Tony about today’s M&A climate (hint: the market is more active than a triathlon athlete) and what it takes to make a deal go smoothly. Keep reading below for some of his key takeaways.

Featured guest

Tony Avila, Founder and Managing Principal, Encore Capital Management

Today's highly active market

  • Tony and his team have completed seven M&A transactions so far this year.
 
  • There are many reasons for selling a company: attractive valuations, retirement plans, investment diversification, and more.
 
  • Today’s buyers are very diverse and include public builders, private builders, wealthy individuals, and international investors.
 
  • Buyers are motivated by a variety of reasons as well: sales growth, trust in US real estate and law, and diversification (in product, geography, and strategy).

What makes for a smooth deal?

  • Strong communication between buyers and sellers is key to ensuring a smooth deal. Avoid games of telephone and—as much as you can—lawyers.
 
  • Faith and trust from clients also goes a long way.
 
  • Check the ego at the door. Be willing to compromise and have faith in your people and the process.
 
  • M&As require patience and persistence more than anything.

Future opportunities

  • Predicting the future is always a moving target, though Tony expects continued high levels of M&A activity through 2022.
 
  • M&A activity will continue to be fueled by shortages in land, shortages in developable lots, and a need for the right people.
 
  • Tony and his team have their eye on possible changes to the capital gains tax rates. Those changes will impact M&A strategies.

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About The Author

Dean Wehrli
Dean Wehrli
Principal
Dean helps housing sector clients figure out not just what might work and what might not, but why.
Shelly Chen
Shelly Chen
Research Analyst II, For-Sale
Shelly is responsible for working on various research projects as it relates to residential for-sale, including supporting our Burns Home Builder Analysis and Forecast report.

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Issues, interviews, and insights into the U.S. housing market. Monthly takes on what’s happening in the housing market today, and what might be happening tomorrow.
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