Over the next several months, Audax acquired three brands in the home remodeling category: Dreamstyle, Remodel USA, and Alure Home Improvements. In January, the company announced the formation of Renovo Home Partners, a Dallas-based direct provider of repair and remodeling services focused on bathrooms, windows, siding, roofing and more. The three brands will now operate under the Renovo umbrella with Dupuy at the helm as CEO. The company is looking to acquire similar businesses across the country to expand its geographic footprint.
An ongoing trend
Home remodeling became popular during the COVID-19 pandemic when many office workers were spending more time at home and decided to beautify their surroundings. Now that most of the COVID restrictions are gone and offices have reopened, it seems questionable whether the remodeling will continue to be popular, but Dupuy and Audax are betting it will. Most workers have not returned to the office full-time, and many companies are adopting remote or hybrid models, resulting in people continuing to spend more time at home than before the pandemic. “As a result of COVID, we’ve rediscovered our home for both work and play,” says Dupuy. “People want to grow old in their homes. With real estate prices rising, many people would rather modernize than buy new.”
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People who already own a home are getting older and are choosing to stay in and repair their home until retirement. The pandemic also prompted many people to flock to the suburbs. Now demand is outstripping supply and houses are becoming more expensive, leading those who already own property to stay and remodel rather than move, explains Dupuy.
“We believe there is significant and sustained momentum in this industry,” said Jay Mitchell, Managing Director at Audax. “There are a number of secular changes underpinning continued tailwinds, such as These include low housing availability prompting prospective buyers to renovate instead, a desire to age in existing homes, rising home values incentivizing home ownership, and a greater interest in out-of-town living and a more flexible work environment. “
Renovo focuses on high-volume, quick remodeling projects as opposed to custom remodels, Dupuy says. Renovo’s businesses are working on short-term remodeling jobs, including shower remodels, cabinet remodels, window and door replacements, roofing, and the like. These projects can typically be completed in one to three days. “This is a very attractive and scalable business model,” notes Dupuy.
“In the early days of COVID, people were more focused on small DIY projects that cost less than $5,000,” says Dupuy. “As things opened up, they started to shift to bigger projects and ‘do it for me’ type projects.” These typically range from $15,000 to $25,000, Dupuy adds.
As a result of COVID we have rediscovered our home for both work and play. People want to grow old in their homes. With real estate prices rising, many people would rather modernize than buy new.
Renovo Home Partners
Scouting for addons
The Dreamstyle business is based in Albuquerque, New Mexico, while Alure is headquartered in East Meadow, New York and Remodel USA is headquartered in Capitol Heights, Maryland. Dupuy would like to expand Renovo’s presence across the country, considering areas such as Texas and the general Southwest, the Midwest, Florida and the Southeast. While Alure and Remodel USA are already gaining a foothold in the Northeast, Dupuy is interested in establishing a larger presence there as well.
According to Mitchell, Renovo initially plans to acquire companies with sales of at least $10 million. “Our goal is to partner with strong operators who have great brands and provide great customer service,” he adds.
The brands will continue to operate under their own names and management teams, with Renovo acting as an umbrella organization handling many back-office functions. Renovo is building a corporate team in Dallas to lead functions in finance and accounting, information technology, and human resources and recruiting. Several important management positions have already been filled. Dupuy has held senior positions at several private equity-backed companies in the past, helping them with buy-and-build strategies. Prior to joining Renovo, he served as interim CEO at MPL Co., a Wynnchurch Capital-backed manufacturer of cultured marble bath products. From 2017 to 2020, Dupuy was an operating partner at Align Capital Partners. There he held various positions at Align-backed companies in various industries as a managing director or board member.
Dupuy views Renovo as more than a holding company. The company strives to share best practices between its brands, build best-in-class IT infrastructure and optimize systems and processes, while allowing the brands to continue to operate independently, benefit from their brand awareness and collaborate with their original executives and founding teams.
“The level of collaboration between our acquired partner companies has been fantastic,” says Dupuy. “Our competition typically replaces management teams and dictates how the business is run. We don’t. We will encourage them to adopt best practice, but I will not tell them what to do.”
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Renovo and Audax spend millions of dollars investing in IT business systems, infrastructure and cybersecurity. They also invest heavily in people and process improvements in areas such as marketing, finance and accounting, human resource management and recruiting. “This provides brands with resources that they could not afford on their own,” says Dupuy.
“We have very diverse dialogues with potential sellers as we respect their brand heritage and management team and take a partnership approach to running the business rather than a heavy-handed one-size-fits-all approach.”