Case Study
Enabling a mid-market PE firm to map growth trends among top US homebuilders
Market Due Diligence | Competitive Landscaping | Construction industry benchmarking
Business Need
- As part of its investment due diligence exercise, a mid-market private equity firm having assets under management of USD 40B+ sought RocSearch’s support in understanding long-term growth patterns among the top 50 public homebuilders in the US.
- It wanted to understand the US homebuilders’ market through a data-driven study focusing on house starts, deliveries and their performance since their initial public offerings (IPOs).
- Furthermore, it wanted to examine the impact of the housing crisis, economic downturns and business changes on growth of the homebuilder market.
Benchmark leading US residential homebuilders and analyse key trends and growth patterns in the context of major strategic events.
The client outlined three key reasons for selecting RocSearch:
- Our extensive prior experience in the Real Estate sector
- Our long-standing relationship with the client and its portfolio companies
- Our proven investment research and advisory capabilities
Approach and Methodology
- An analyst team was assigned to compile and analyse annual housing start and closure data for the 50 largest publicly listed US homebuilders, focusing exclusively on those involved in residential construction. The team identified 23 eligible homebuilders via market capitalization, annual revenue rankings, S&P/industry categorisations and credible secondary sources.
For each of the homebuilders, we created a historical performance profile, including IPO date, year-wise total revenue, annual housing closes/starts since IPO, and commentary on major events.
- The team collected annualised figures for housing starts and closes from the year of IPO (no earlier than 1975) to the most recent fiscal year available leveraging broker reports, SEC filings (10-Ks), investor presentations, and earnings call transcripts.
- The team built an interactive dashboard containing year-wise data per company, including year founded, IPO year, headquarters, total revenues by each year since IPO, housing volumes, and any material strategic events affecting growth (e.g., mergers & acquisitions (M&A), asset divestments, regional expansions).
- Key macroeconomic events (e.g., Great Financial Crisis 2008 and COVID-19 pandemic) were annotated to contextualise volume fluctuations.
Business Outcomes
- The client received a comprehensive side-by-side comparison of annual housing volume data for the largest homebuilders in the country based on which it could visualise key trends and growth patterns across cycles.
- The client’s investment team leveraged RocSearch’s outputs to map market share shifts over time and understand the impact of strategic events across companies.
Insights from RocSearch enhanced the client’s understanding of the residential homebuilder market and supported strategic decision-making.
