What Strategists Need to Know About the Latest M&A Deal

Empire Communities, one of North America’s largest privately held homebuilders,

Image source: SouthCraft Builders

For SouthCraft, the deal provides:

  • Financial and operational backing from a well-capitalized, internationally recognized homebuilder.
  • A pathway for growth with a broader platform to leverage efficiencies in purchasing, land development, and marketing.
  • A logical succession strategy for founder Justin Stringfellow, who at 70 joins a growing cohort of homebuilding entrepreneurs looking to exit their businesses in an era of rising capital constraints.

Why Homebuilders Are Looking to Sell

Private homebuilders are facing a more challenging business environment than they did just two or three years ago:

  • Higher-for-Longer Interest Rates – Private builders, especially those reliant on traditional bank financing, are experiencing tighter access to capital and increasing borrowing costs.
  • Land Access and Competition – The largest public and private builders have dominated land pipelines, making it difficult for smaller firms to acquire land at competitive prices.
  • Operational Pressures – Rising construction costs, supply chain volatility, and labor shortages continue to put strain on builders operating at smaller volumes.
  • Exit Planning for Aging Owners – Many private homebuilding founders, particularly those without a family succession plan, are seeking a structured exit that allows their companies to continue under a larger organization.

In today’s market, a lot of smaller homebuilders are considering a sale—not because they can’t compete, but because capital is harder to come by,” Yelland explains. “Larger builders need strong land positions to fuel future growth, and that’s what’s driving many of these deals right now. In SouthCraft’s case, its deep land relationships and development expertise made it an ideal fit for Empire, which continues to expand its footprint in high-growth markets across the Southeast.”

For Stringfellow, this marks the third time he has successfully sold a homebuilding operation. After an earlier, smaller company sale, he sold Oakmont Homebuilders to LGI Homes in 2014. His longtime business partner, David Hensley, who originally went with Oakmont to LGI, returned to SouthCraft in 2019 and played a role with the company through this acquisition. Hensley will stay on with Empire as a regional land manager.

Empire’s U.S. Growth Playbook

Empire’s acquisition of SouthCraft is the latest move in a strategic expansion push that has seen the Canadian homebuilder establish and deepen its presence in multiple U.S. markets.

In recent years, Empire has:

  • Acquired Shea Homes North Carolina in 2021 (an acquisition where BAG also served as the seller’s advisor in the deal with Empire), solidifying its presence in the Carolinas.
  • Expanded into Colorado in 2024 with the acquisition of Covington Homes, continuing its market diversification.
  • Grown its presence in Texas, Georgia, Tennessee, and the Carolinas, leveraging acquisitions to drive efficient scale.

“This acquisition allows us to continue on our path of building scale in the markets we operate in. We are excited to welcome SouthCraft to the Empire family, strengthening our ability to serve a diverse range of homebuyers and expanding our presence in the Southeast.” — Wendy Hudson, COO, Empire Communities, US

Empire’s strategy is consistent with other large international homebuilders expanding into the U.S., including:

  • Japan-based Sumitomo, Daiwa House, and Sekisui House
  • China-based Landsea Homes
  • Canada-based firms like Mattamy Homes, Brookfield Residential, and Minto Communities

What sets Empire apart is its focus on acquiring established regional homebuilders, maintaining their existing teams and operational structures, rather than replacing them with a fully centralized model.

Several buyers expressed interest in SouthCraft, but according to Yelland, the decision was about more than just the highest bid.

Judson and David were very concerned about finding the right buyer —someone who would support the team and build on their legacy. Empire had already acquired Shea Homes in Charlotte, and Judson spoke directly with the Sheas, who vouched for Empire’s culture, long-term vision, and ability to integrate a business without disrupting its strengths.’ Yelland added that the strong relationship between BAG and Empire’s leadership—particularly Andrew Guizzetti—helped align both parties on deal structure and future growth.”