Kodiak Building Partners to acquire Texas dealer
Denver-based Kodiak Building Partners has acquired the assets of Gulf & Basco, a specialty dealer of building products based in Houston. Terms of the transaction were not disclosed.
The one-unit pro dealer sells windows, kitchen cabinets, appliances, countertops and doors. A family-owned operation, Gulf & Basco has been in business for 75 years.
Commenting on the acquisition, Kodiak chairman and CEO Paul Hylbert said: “We are very excited about having Gulf and Basco join our Kodiak team. CEO Stuart Feldman and his colleagues have developed a very effective distribution business serving the greater Houston market, and we envision growing the business in Texas on the base his group has established.”
Gulf & Basco’s team of 80 people will remain, with Feldman continuing as the CEO and the management team remaining in place. “We see the need to grow beyond our current distribution footprint and are delighted to join forces with Kodiak to achieve that goal,” explained Feldman.
Eric Miller, a Kodiak spokesman, told Home Channel News: “We will be looking to expand their footprint throughout the major markets in Texas.”
Recognizing that the building industry is very local in nature, Kodiak and its investor partners work with and support management in helping grow businesses in the $10 million to $200 million sales range. The company provides capital and strategic support to allow its operating partners to make decisions that reflect conditions in their individual markets.
NAHB testifies before Congress on tighter mortgages
The National Association of Home Builders (NAHB) told a Congressional committee on July 11 that proposed mortgage lending reforms under the Dodd-Frank Act must protect consumers’ access to credit to allow them to enter the housing market.
Testifying before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit, NAHB first vice chairman Rick Judson, a home builder from Charlotte, N.C., said that the "NAHB believes a housing finance system that provides adequate and reliable credit to home buyers at reasonable interest rates through all business conditions is critical to our nation’s economic health."
At the heart of this issue is the definition of a new "qualified mortgage" (QM) as required under the Dodd-Frank legislation passed in 2010. The legislation includes an "ability to repay" provision that requires lenders to establish that home buyers have a reasonable chance of paying back the loan at the time the mortgage is written. This will set the foundation for the future of mortgage financing, as all mortgages will be subject to these requirements.
"NAHB urges the Consumer Financial Protection Bureau (CFPB) and policymakers to consider the long-term ramifications of these rules on the market, and not to place unnecessary restrictions on the housing market based solely on today’s economic conditions," said Judson.
NAHB has joined with 32 other housing, banking, civil rights and consumer groups to urge the CFPB to issue broadly defined and clear QM standards that contain strong consumer protections, promote mortgage liquidity in the marketplace and provide lenders proper incentives to make home loans to creditworthy borrowers.
A narrowly defined QM would put many of today’s creditworthy loans and borrowers into the non-QM market, which would undermine prospects for a housing recovery. Loans that fail to qualify as QMs would be less available and far costlier because lenders and investors would face penalties because they failed to satisfy the new ability-to-repay requirement.
The QM may also narrow the flow of credit because lenders face a high risk of legal challenges to their loan decisions. The NAHB supports a QM safe harbor definition that would provide more assurance to lenders that they will not be subject to increased litigation if they use sound underwriting criteria. The safe harbor should incorporate specific ability-to-repay standards, said Judson.
"We recommend that the regulators work with NAHB and other industry stakeholders to develop a workable safe harbor," said Judson. "The final rule should promote liquidity by providing consumers stronger protections than those proposed by the Federal Reserve Board and giving financial institutions definitive lending criteria that reduces excessive litigation exposure."
Noting that in a period of historically low interest rates, prospective home buyers are finding it more difficult to obtain mortgage credit, Judson called on policymakers to take great care to avoid further changes that could exacerbate the situation.
Sales rise 24.7% at Jewett-Cameron
Jewett-Cameron Trading Co. reported $16.11 million in sales for its third fiscal quarter, a 24.7% increase over sales of $12.91 million for the same quarter of 2011.
Net income for the quarter, which ended May 31, was $937,090, compared with net income of $604,324 for the third quarter of 2011.
For the nine-month period, Jewett-Cameron reported sales of $35.1 million compared with sales of $30.8 million for the corresponding nine months a year ago. Due to the favorable ruling from the Oregon Supreme Court regarding the company’s lawsuit filed in relation to the acquisition of inventory by Greenwood Products, Jewett-Cameron reversed $1,450,363 of its litigation reserve and accrued interest during the current nine-month period. This contributed to the net income for the nine-month period ended May 31 of $2.28 million, compared to net income of $254,938 in the prior year’s period, which was negatively affected by costs from the lawsuit.
"Our continued focus of being a reliable and valuable supplier of quality products to our customers is reflected in our higher sales for both the quarter and nine -month periods," said CEO Don Boone. "We have also successfully test marketed several new products, some of which have begun shipping to customers. However, high material and transportation costs continue to limit our margins."
Jewett-Cameron Trading Co. is a holding company that, through its subsidiaries, operates out of facilities located in North Plains, Ore. Jewett-Cameron Lumber Corp.’s business consists of the manufacturing and distribution of specialty metal products and wholesale distribution of wood products to home centers and other retailers located primarily in the United States. Greenwood Products is a processor and distributor of industrial wood and other specialty building products principally to customers in the marine and transportation industries in the United States.