Warren Buffett's Clayton Homes snags top Kansas City, MO builder Summit Custom Homes
In its third acquisition this year, Tennessee-based Clayton Homes, a subsidiary business of Warren Buffett’s Berkshire Hathaway focused on manufactured and modular housing, bought Kansas City, MO’s largest homebuilder, Summit Custom Homes, to grow its site-built business, according to the Kansas City Business Journal.
The financial terms of the deal were not disclosed, but it includes 1,200 lots in and around Kansas City and Summit’s operating assets. Summit will keep its employees and its brand.
The move comes as Clayton Properties, a division of Clayton, expands the site-built business it launched in the fall of 2015. The company sold 500 site-built homes this year, according to The Kansas City Star.
Offsite construction methods like modular and manufactured building can be less expensive than site-built construction while helping builders implement energy-efficiency features by allowing for installation in a controlled environment, rather than subjecting the project to the variables of the jobsite.
Clayton, which had a 45% share of manufactured home sales in 2014, according to The Wall Street Journal, said the continued expansion into site-built aims to grow its reach and open the company up to buyers seeking a slightly more customizable, higher-priced product. The company has faced recent criticism for alleged predatory lending practices in its manufactured housing business, according to the Motley Fool.
In April, Clayton acquired Goodall Homes, a builder of single-family homes, townhomes and condominiums based in Gallatin, TN, in addition to River Birch Homes, a manufactured housing business in Hackleburg, AL. Last fall, Clayton entered the site-built business with the acquisition of Georgia homebuilder Chafin Communities for nearly $50 million.
Texas, Louisiana and Florida recorded the most manufactured housing shipments among the 50 U.S. states and the District of Columbia in 2015, according to U.S. Census Bureau data.
- The Kansas City Star Warren Buffett’s business buys KC area’s largest home builder
- Kansas City Business Journal Berkshire Hathaway unit buys KC area's top homebuilder