Japanese homebuilder Sekisui House has announced a definitive agreement to acquire 100% shares of US-headquartered MDC in an all-cash transaction valued at $4.9bn.
This acquisition is expected to make Sekisui the fifth-largest housebuilder in the US, based on the number of houses closed in 2022.
The transaction will be executed through a reverse triangular merger, where a newly established wholly-owned company, Clear Line, will merge with MDC.
The remaining company will be MDC, which will become a wholly-owned subsidiary of Sekisui, and shareholders will receive the cash consideration.
MDC shareholders are expected to receive $63 per share in cash.
This amount reflects a 19% premium over the closing stock price on 17 January 2024 and a 41% premium to the 90-day volume-weighted average trading price.
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By GlobalDataThis move is anticipated to enhance MDC’s quality of housing by integrating Sekisui’s advanced technologies and practices.
Sekisui will transfer technology, including zero-emission processes, to expand its high-quality offerings to MDC customers.
It also plans to introduce a fully integrated value chain to MDC, from insights and design to after-sales services, improving efficiency and the homebuyer experience.
The acquisition aligns with Sekisui’s Global Vision and expands its brand.
MDC president, CEO, and director David Mandarich said: “MDC, through our Richmond American Homes brand, has been trusted by customers for decades.
“As part of Sekisui House’s US family of brands, we expect new opportunities for growth across our footprint for our team members and within our customer offering.”
The acquisition is anticipated to conclude in the first half (H1) of 2024, pending approval from MDC’s stockholders, regulatory approvals, and other customary conditions.
