KB Buys Midwest Home Builder

Los Angeles developer KB Home announced Friday that it had bought Chicago-based Zale Homes for about $33 million, including debt.

KB said the acquisition marked its entry into the Midwest. Privately held Zale delivered 302 homes last year and had revenue of about $106 million.

Chicago is the largest new-home market outside of the Sunbelt, with more than 25,000 single-family home building permits issued annually for the last five years, KB Home Chairman Bruce Karatz said.

“Chicago’s position as the No. 1 new-home market in the Midwest makes it the right fit for KB Home and a strong platform for growth in the region,” he said.

KB Home is one of the country’s largest home builders, with divisions in Arizona, California, Colorado, Florida, Georgia, Illinois, Nevada, New Mexico, North Carolina and Texas.

Shares of KB Home closed down $1.02 at $58.98 on the New York Stock Exchange before the acquisition was announced.