For Hovnanian, acquiring Washington Homes wasan obvious move. NVR Inc. Hovnanian entered the Washington area market a few years ago and was slowly building the business, last year selling about 300 new homes in the area. But it's a long climb from 300 to the 1,500 that Washington Homes built and sold in the area last year. You have more clout with the contractors and most important of all, you have more clout when it comes to land purchases. The biggest players tend to get the first crack at some of the best parcels of land, and that's key in the home-building business.
Smaller builders pay the price because their access to land is more difficult.
Hovnanian said he was also pleased to get Washington Homes' senior managers in the deal. All of them stayed after the merger. DeCesaris, a boyish 45, was the president, chairman and chief executive of Washington Homes. The investment community wants larger-cap companies. And as one of the top 10 home builders in the country, you have better, immediate access to capital markets.