NXT Building Group moves into Victoria with Arden buy
Asahi Kasei Homes-owned NXT Building Group has made its long-anticipated move into the Melbourne market with the acquisition of sustainability-focused builder Arden Homes for an undisclosed price.
The move by Newcastle-based NXT, formerly known as MJH Group – and the second-largest builder nationally with 4143 housing starts – to buy a company that ranked 64th nationally last year with just 228 starts gives it a crucial footprint in the market it has lacked.
“Victoria has been on our radar for some time,” NXT managing director Andrew Helmers told The Australian Financial Review on Monday.
“We will probably look to launch new products and brands in the market using Arden as the platform to become a little bit more mainstream at some point in the future.”
The acquisition makes it clear that NXT has given up, at least for now, on the idea of expanding operationally in the second-largest state through a tie-up with ASX-listed Simonds Group, in which NXT had built up a 26.5 per cent stake, second only to that of founder Gary Simonds.
But Mr Helmers left the door open on Monday for a further collaboration with Simonds, Victoria’s third-largest builder, pointing out his company retained a significant stake in Simonds and would likely expand through other acquisitions as well.
“We are looking for other opportunities,” he said. “If it happens to be Simonds or anyone else those opportunities will come up and we will evaluate them as we get them.”
Last November, NXT – which used its stake in Simonds in 2016 to block a lowball planned privatisation of the company by the wealthy Simonds and Roche families – declined to take part in a $25.5 million capital raise it needed to work through difficult conditions, allowing its holding to be diluted down to 10.9 per cent as a result.
But NXT had already telegraphed plans to expand in Victoria independently of Simonds, saying almost two years ago that the rocky relationship between the two companies stood in the way of a productive operational tie-up.
Arden has a product range that includes a 6-star Green Star all-electric home, and the company advocates mandating the use of solar or renewable power to improve the energy efficiency of standalone homes.
Its addition to the ranks of NXT puts it alongside McDonald Jones Homes, Mojo Homes and Complete by MJH in NSW, Brighton Homes in Queensland, Wilson Homes in Tasmania and Weeks Homes and Akora Homes in South Australia.
The most recent earnings figures Arden filed with the Australian Securities and Investments Commission are for 2019, before the pandemic hit. They show the company made a net profit of $1.8 million on $84.5 million of revenue.
Arden director Dean Morrison will remain with the company as chief executive and all staff will also stay.
“I like what the NXT Building Group stands for and I see it as an exciting time to partner with a firm that can provide a larger offering of products to the Melbourne market,” Mr Morrison said.
“While the market is in a challenging time now, we are still seeing a high level of interest from customers looking to build a new home and with the strength of NXT behind us that will give customers confidence and certainty.”
