OSAKA, Japan and DENVER - Sekisui House, Ltd. (TSE:1928), a leading Japanese homebuilder, has completed the acquisition of M.D.C. Holdings, Inc. (NYSE: NYSE:MDC), a prominent U.S. homebuilder. The transaction, which was finalized today, saw MDC shares acquired at $63.00 each, amounting to an equity value of $4.9 billion.
The acquisition marks a significant expansion for Sekisui House in the United States, as it adds MDC to its portfolio of companies, including Woodside (OTC:WOPEY) Homes, Holt Homes, Chesmar Homes, and Hubble Homes. This move is expected to bolster Sekisui House's annual supply to approximately 15,000 units across 16 states and expedite the company's goal of providing 10,000 detached homes in overseas markets by the fiscal year 2025.
Yoshihiro Nakai, President and CEO of Sekisui House, expressed enthusiasm for the merger, highlighting the strategic advancement in the U.S. market and the potential for combining Japanese and American technologies. Toru Tsuji, CEO of SH Residential Holdings, LLC, emphasized the commitment to offering high-quality, environmentally friendly homes in line with the company's global vision.
Following the acquisition, MDC will be delisted from the New York Stock Exchange. Financial advisory for Sekisui House was provided by Moelis (NYSE:MC) & Company LLC and Mitsubishi UFJ (NYSE:MUFG) Morgan Stanley (NYSE:MS) Securities, with legal advice from Morrison Foerster LLP. MDC's financial advisor was Vestra Advisors, LLC, with legal counsel from Paul, Weiss, Rifkind, Wharton & Garrison LLP and Brownstein Hyatt Farber Schreck, LLP.
Sekisui House, established in Japan, has a longstanding reputation in building custom detached houses and various other real estate services. The company has delivered over 2.6 million homes globally and is recognized for its commitment to ESG management.
MDC, known for its Richmond American Homes (NYSE:AMH) brand, has been a significant player in the U.S. homebuilding industry for over 50 years, with more than 240,000 homes built since 1977. Larry Mizel and David Mandarich, executives at MDC, expressed optimism for the company's future growth and integration with Sekisui House.
The information in this article is based on a press release statement.
InvestingPro Insights
As Sekisui House, Ltd. (TSE:1928) finalizes its acquisition of M.D.C. Holdings, Inc. (NYSE: MDC), investors and industry watchers are closely examining the financial metrics that could impact the combined entity's future performance. According to InvestingPro, MDC's Market Cap (Adjusted) stands at approximately $14.04 billion USD, reflecting the company's substantial size in the homebuilding market.
The P/E Ratio (Adjusted) for MDC as of the last twelve months ending Q4 2024 is 11.52, which could be seen as a sign of investor confidence in the company's earnings potential relative to its share price. Moreover, the Revenue Growth (Quarterly) for Q4 2024 at 14.9% indicates a robust expansion, aligning with Sekisui House's growth objectives in the U.S. market.
InvestingPro Tips suggest that the PEG Ratio of 0.91 for MDC points towards a potentially favorable growth trajectory when considering the price of shares relative to earnings growth. Additionally, the Dividend Growth over the last twelve months of 11.82% showcases the company's commitment to returning value to shareholders.
For investors seeking more in-depth analysis, InvestingPro offers additional tips that could provide further clarity on the implications of this acquisition. Using the coupon code PRONEWS24, readers can receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription, gaining access to a wealth of investment insights. There are numerous additional tips available on InvestingPro that could help investors navigate the post-acquisition landscape for Sekisui House and MDC.
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