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HomeSphere announces new ownership

BY HBSDealer Staff

HomeSphere, a B2B customer acquisition and retention platform for the homebuilding industry, has completed a management buyout.

According to the company, the transaction positions HomeSphere as the exclusive digital platform for residential construction.

With new ownership, Glenn Renner has been appointed CEO. Jim Waldrop, HomeSphere’s founder, will become chairman of a newly formed advisory board. All other employees will continue in their current roles.

HomeSphere was founded in 1999 to create a digital community for suppliers and builders in the construction industry. Its network currently includes more than 80 building product manufacturer brands across 23 product categories with more than 17,000 local and regional homebuilders.

“The buyout is a significant milestone in our continuing evolution,” said Renner. “Management is committed to growth and innovation, and our new structure will enable HomeSphere to expand its product offerings and provide additional value-added services to the homebuilding industry."

Financing for the transaction was provided by Cypress Growth Capital, and East Wind Advisors acted as exclusive financial advisor to the seller.

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Trendmaker Homes makes initial acquisition in Austin

BY HBSDealer Staff

Trendmaker Homes, a member of TRI Pointe Group, has made its initial acquisition (and expansion into) the Austin, Texas, market.

Houston-based Trendmaker Homes has acquired 38 lots in Hays County for single-family homes within the Belterra master-planned community by Crescent Communities.

“Austin marks an exciting milestone for us,” said Doug Bauer, CEO of TRI Pointe Group. “TRI Pointe Group is a growth-oriented homebuilder focused on some of the country’s top performing housing markets and Trendmaker Homes’ expansion into Austin aligns with our overall land acquisition strategy. It also demonstrates TRI Pointe’s ability to leverage our national resources and leadership, while utilizing the regional expertise and agility of Trendmaker’s local builder brand.”

The new homes will come in eight floor plans ranging from 3,400 square feet to 4,200 square feet. Sales are slated to begin in January 2016, with a targeted grand opening planned for April 2016.

Trendmaker Homes is also in the process of securing additional homesites at a second location in the city.

“After nearly 45 years in the Houston market, we are thrilled to grow our footprint in Texas,” said Will Holder, president of Trendmaker Homes. “Austin has experienced tremendous job growth in the last year and, as a member of the TRI Pointe Group, we are well-positioned both financially and operationally to expand our platform, bringing Austin homebuyers new designs as well as the included features that Trendmaker has become known for.”

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Electrolux comments on stalled GE acquisition

BY HBSDealer Staff

Frank Wagner, senior VP of industrial operations for Electrolux North America, released a statement on Wednesday criticizing the U.S. government's attempts to block the Electrolux-GE Appliances merger.

The statement comes as Electrolux prepares to go to trial with the U.S. Department of Justice, which is attempting to stop the Electrolux from scooping up the company. In the government's view, the proposed merger would violate U.S. antitrust law, leading to a market where 90% of stoves and ovens sold in the U.S. would be made by two companies (Electrolux together with GE, and Whirlpool).

Electrolux first agreed to acquire the appliances business of General Electric for a cash consideration of $3.3 billion in September of 2014.

A lawyer for Electrolux told Reuters on Thursday that the company is not in settlement talks with the DOJ.

Read Wagner's statement below.

As a global appliance manufacturer, Electrolux knows firsthand how rapidly business is moving forward.  Product innovation is accelerating, and new global competitors are aggressively gaining market share from those of us who have a longstanding history in the industry.  The consumer purchasing landscape has changed dramatically with the development of new technologies and increased e-commerce sales, and we see expanding consumer options at every price point.

However, it is against this competitive backdrop that the U.S. Department of Justice (DOJ) has sued to block Electrolux's acquisition of GE Appliances.

After 13 months of review, negotiations and litigation with the DOJ, we fundamentally disagree with the government's assessment of the acquisition. We are confident in the merits of our case as we prepare to defend ourselves in federal court during a trial beginning November 9.

The DOJ's view shows an incomplete understanding of how appliances are manufactured and sold.  In particular, the DOJ believes that U.S. consumers do not have enough choice when they want to buy an appliance.  Yet consumers can enter any national home improvement retailer and choose an appliance manufactured by six or seven different companies.

I have spent 13 years overseeing manufacturing operations at Electrolux, and know that the processes required for appliance production are fairly universal and are not capital intensive.  As a result, the appliance industry has a relatively low barrier to entry. Companies with established manufacturing in similar industries can easily enter the appliance business.

A number of global companies – like Samsung and LG from Korea, Haier and Midea from China, and Arcelik from Turkey – have done just that. These companies have aggressively invested and expanded into the U.S. appliance business.  In 2000, Samsung and LG had not entered the U.S. appliance market. Today, they together hold more than 25 percent of the market share.

There is nothing wrong with stiff competition. In my job, it is the driving force that fuels innovation and creates higher quality, less expensive products for consumers.

What makes this DOJ action difficult to understand is that we have seen this movie before. There is precedent. In 2006, the DOJ approved a similar transaction: Whirlpool's acquisition of Maytag. Ten years ago, DOJ decision makers understood the reality of competition in the appliance industry, so it is difficult to comprehend why they do not understand it now.

In my job, I also get to see the driving force of manufacturing in local communities here in the United States. Electrolux has a rich, nearly 100-year history of U.S. manufacturing, and a commitment to the communities in which it operates.  Blocking this acquisition will only limit opportunities for thousands of U.S. manufacturing workers and deny significant prospects for future economic growth in local communities across the country where GE Appliances and Electrolux maintain operations.

Electrolux is confident that our proposed acquisition of GE Appliances enhances competition and innovation in the rapidly evolving appliance market. The DOJ should get out of its own way and let a transaction that is good for competition, good for jobs, and good for consumers move forward.

Frank Wagner
Electrolux North America
Senior Vice President of Industrial Operations

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