IPOs and Mergers & Acquisitions with Tony Avila | John Burns Real Estate Consulting

IPOs and Mergers & Acquisitions with Tony Avila



Patience and persistence: the common denominators between Ironman triathlons and mergers and acquisitions. Tony Avila, Co-Founder and Managing Principal of Encore Capital Management, knows this better than anyone. In this week’s New Home Insights podcast episode, we speak with Tony about today’s M&A climate (hint: the market is more active than a triathlon athlete) and what it takes to make a deal go smoothly. Keep reading below for some of his key takeaways.

Today’s highly active market

  • Tony and his team have completed seven M&A transactions so far this year.
  • There are many reasons for selling a company: attractive valuations, retirement plans, investment diversification, and more.
  • Today’s buyers are very diverse and include public builders, private builders, wealthy individuals, and international investors.
  • Buyers are motivated by a variety of reasons as well: sales growth, trust in US real estate and law, and diversification (in product, geography, and strategy).

What makes for a smooth deal?

  • Strong communication between buyers and sellers is key to ensuring a smooth deal. Avoid games of telephone and—as much as you can—lawyers.
  • Faith and trust from clients also goes a long way.
  • Check the ego at the door. Be willing to compromise and have faith in your people and the process.
  • M&As require patience and persistence more than anything.

Future opportunities

  • Predicting the future is always a moving target, though Tony expects continued high levels of M&A activity through 2022.
  • M&A activity will continue to be fueled by shortages in land, shortages in developable lots, and a need for the right people.
  • Tony and his team have their eye on possible changes to the capital gains tax rates. Those changes will impact M&A strategies.

 


For a full transcript of this episode, click here.

 

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Dean Wehrli If you have any questions about our podcast, please contact Dean Wehrli, Principal at (916) 647-3263 or by email.
Shelly Chen If you have any questions, please contact Shelly Chen, Consultant at (916) 753-4631 or by email.