Toll Brothers Announces Acquisition of Keller Homes to Drive Expansion into Colorado Springs Market

Rhea-AI Summary

Toll Brothers (NYSE: TOL) expands into the Colorado Springs market by acquiring Keller Homes, a prominent local builder with a reputation for quality. Keller has built nearly 4,000 homes and currently holds a backlog of 84 homes valued at approximately $44 million. This acquisition allows Toll Brothers to enhance its position in a dynamic housing market rated as the #1 hottest in the U.S. by USA Today. The deal also includes rights to purchase over 300 lots controlled by Keller, expanding Toll's reach in Colorado's residential market.

Positive

• Acquisition of Keller Homes enhances market presence in Colorado Springs.
• Keller Homes brings a strong backlog of 84 homes valued at $44 million.
• Rights to purchase over 300 lots enable future expansion.

Negative

• None.

FORT WASHINGTON, Pa., Sept. 17, 2020 (GLOBE NEWSWIRE) -- Toll Brothers, Inc., (NYSE:TOL) (www.TollBrothers.com), the nation’s leading builder of luxury homes, today announced its expansion into the Colorado Springs market through the acquisition of Keller Homes, one of the top private home building companies in Colorado Springs. Rated in 2020 by USA Today as the “#1 Hottest US Housing Market” and in 2019 by US News & World Report as #3 “Best Place to Live”, Colorado Springs is a dynamic housing market which will complement Toll Brothers’ current operations in metro Denver and Fort Collins.

David Keller, a 1974 West Point graduate, founded Keller Homes in 1983. His wife Pam has overseen Sales and Marketing functions. Since inception, Keller Homes has built nearly 4,000 homes in the Colorado Springs market. The Company serves a wide range of homebuyers including first-time, move-up, and move-down buyers at price points from the mid-$400,000s to over $700,000. At the date of acquisition, the Company had approximately $44 million in backlog consisting of 84 homes with an average price of $520,000.

Keller Homes is a capital-efficient operator that brings a solid supply of controlled lots and a diversified presence across Toll’s luxury, affordable luxury and active living offerings. In addition to Keller’s existing backlog of 84 homes, Toll Brothers has acquired rights to purchase over 300 lots Keller controls throughout Colorado Springs. Currently, the company has 4 actively selling communities.

Douglas C. Yearley, Jr., Toll Brothers’ chairman and chief executive officer, stated: “We are thrilled to be joining with Keller Homes. Their team will enable us to continue to expand our operations in Colorado, which is one of our strongest markets. Keller Homes has a great reputation based on nearly four decades in the market. We welcome them to the Toll Brothers family.”

Dave Keller, founder of Keller Homes, stated: “We are excited to join with Toll Brothers, whose financial resources and luxury brand will enhance the platform we have built over the past thirty-seven years. Together, we look forward to expanding our operations across a variety of price points in the Colorado Springs market.”

Robichaud Financial Services acted as exclusive financial advisor to Keller Homes.

Toll Brothers, Inc., A FORTUNE 500 Company, is the nation's leading builder of luxury homes. The Company began business over fifty years ago in 1967 and became a public company in 1986. Its common stock is listed on the New York Stock Exchange under the symbol “TOL.” The Company serves first-time, move-up, empty-nester, active-adult, affordable luxury and second-home buyers, as well as urban and suburban renters. It operates in 24 states: Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Idaho, Illinois, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, and Washington, as well as in the District of Columbia.

Toll Brothers builds an array of luxury residential single-family detached, attached home, master planned resort-style golf, and urban low-, mid-, and high-rise communities, principally on land it develops and improves. The Company acquires and develops rental apartment and commercial properties through Toll Brothers Apartment Living, Toll Brothers Campus Living, and the affiliated Toll Brothers Realty Trust, and develops urban low-, mid-, and high-rise for-sale condominiums through Toll Brothers City Living. The Company operates its own architectural, engineering, mortgage, title, land development and land sale, golf course development and management, and landscape subsidiaries. Toll Brothers operates its own alarm monitoring company through TBI Smart Home Solutions, a complete home technology division.  In addition to providing security monitoring, TBI Smart Home Solutions offers homeowners a full range of low voltage options, allowing buyers to maximize the potential of technology in their new home. The Company also operates its own lumber distribution, house component assembly, and manufacturing operations. Through its Gibraltar Real Estate Capital joint venture, the Company provides builders and developers with land banking, non-recourse debt and equity capital.

In 2020, Toll Brothers was named World’s Most Admired Home Building Company in Fortune magazine’s survey of the World’s Most Admired Companies®, the sixth year in a row it has been so honored. Toll Brothers has won numerous other awards, including Builder of the Year from both Professional Builder magazine and Builder magazine, the first two-time recipient from Builder magazine.  The Company sponsors the Toll Brothers Metropolitan Opera International Radio Network, bringing opera to neighborhoods throughout the world. For more information visit www.TollBrothers.com.

Toll Brothers discloses information about its business and financial performance and other matters, and provides links to its securities filings, notices of investor events, and earnings and other news releases, on the Investor Relations section of its website investors.TollBrothers.com.

Forward-Looking Statements

This release contains or may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. One can identify these statements by the fact that they do not relate to matters of a strictly historical or factual nature and generally discuss or relate to future events. These statements contain words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “may,” “can,” “could,” “might,” “should,” “likely,” “will,” and other words or phrases of similar meaning. Such statements may include, but are not limited to, information and statements regarding: the impact of Covid-19 on the U.S. economy, the markets in which we operate or may operate, and on our business; our strategic priorities; our land acquisition, land development and capital allocation priorities; market conditions; demand for our homes; anticipated operating results and guidance; home deliveries; financial resources and condition; changes in revenues; changes in profitability; changes in margins; changes in accounting treatment; cost of revenues, including expected labor and material costs; selling, general, and administrative expenses; interest expense; inventory write-downs; home warranty and construction defect claims; unrecognized tax benefits; anticipated tax refunds; sales paces and prices; effects of home buyer cancellations; growth and expansion; joint ventures in which we are involved; anticipated results from our investments in unconsolidated entities; our ability to acquire or dispose of land and pursue real estate opportunities; our ability to gain approvals and open new communities; our ability to market, construct and sell homes and properties; our ability to deliver homes from backlog; our ability to secure materials and subcontractors; our ability to produce the liquidity and capital necessary to conduct normal business operations or to expand and take advantage of opportunities; and the outcome of legal proceedings, investigations, and claims.

Any or all of the forward-looking statements included in this release are not guarantees of future performance and may turn out to be inaccurate. This can occur as a result of incorrect assumptions or as a consequence of known or unknown risks and uncertainties. The major risks and uncertainties – and assumptions that are made – that affect our business and may cause actual results to differ from these forward-looking statements include, but are not limited to:

• the effects of the ongoing Covid-19 pandemic, which are highly uncertain, cannot be predicted and will depend upon future developments, including the severity of Covid-19 and the duration of the outbreak, the duration of existing social distancing and shelter-in-place orders, further mitigation strategies taken by applicable government authorities, the availability of a vaccine, adequate testing and therapeutic treatments and the prevalence of widespread immunity to Covid-19;
   
• the effect of general economic conditions, including employment rates, housing starts, interest rate levels, availability of financing for home mortgages and strength of the U.S. dollar;
   
• market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions;
   
• the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such parcels;
   
• access to adequate capital on acceptable terms;
   
• geographic concentration of our operations;
   
• levels of competition;
   
• raw material and labor prices and availability;
   
• the effect of U.S. trade policies, including the imposition of tariffs and duties on home building products and retaliatory measures taken by other countries;
   
• the effects of weather and the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, and shortages and price increases in labor or materials associated with such natural disasters;
  
  
• the risk of loss from acts of war, terrorism or outbreaks of contagious diseases, such as Covid-19;
   
• transportation costs;
   
• federal and state tax policies;
   
• the effect of land use, environment and other governmental laws and regulations;
   
• legal proceedings or disputes and the adequacy of reserves;
   
• risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, indebtedness, financial condition, losses and future prospects;
   
• changes in accounting principles;
   
• risks related to unauthorized access to our computer systems, theft of our homebuyers’ confidential information or other forms of cyber-attack; and
   
• other factors described in “Risk Factors” included in our Annual Report on Form 10-K for the year ended October 31, 2019 and in subsequent filings we make with the Securities and Exchange Commission (“SEC”).

Many of the factors mentioned above or in other reports or public statements made by us will be important in determining our future performance. Consequently, actual results may differ materially from those that might be anticipated from our forward-looking statements.

Forward-looking statements speak only as of the date they are made. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise.

For a more detailed discussion of these factors, see the information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our most recent Annual Report on Form 10-K filed with the SEC and in subsequent reports filed with the SEC.

Frederick N. Cooper (215) 938-8312
fcooper@tollbrothers.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/f964e466-8d6e-4887-873f-ddf0b9a10fb7

FAQ

What is the significance of Toll Brothers acquiring Keller Homes?

The acquisition allows Toll Brothers to expand its market presence in Colorado Springs, enhancing its operations in a rapidly growing housing market.

How many homes has Keller Homes built?

Keller Homes has built nearly 4,000 homes in Colorado Springs since its inception in 1983.

What is the estimated value of Keller Homes' current backlog?

Keller Homes has a backlog valued at approximately $44 million, consisting of 84 homes.

What additional assets did Toll Brothers acquire through this deal?

Toll Brothers acquired rights to purchase over 300 lots controlled by Keller Homes for future development.