On the 18th, Sekisui House announced that M. D. C. Holdings (MDC) for $63 per share, for a total of $4,914 million (approximately 726.2 billion yen).
The acquisition price per share will be approximately 19% higher than MDC’s closing stock price on the 17th. The company plans to acquire 100% of MDC shares, and the process is expected to be completed in the first half of 2024.
MDC, headquartered in Denver, Colorado, is involved in the housing construction business in 34 cities in 16 states, and its strength is that it has a product lineup that can meet diversifying needs. At a press conference on the evening of the same day, the company’s president, Yoshihiro Nakai, said that he praised the company’s wide-ranging business expansion and the fact that it is a listed company with a strong organizational structure.
Sekisui House began its full-scale expansion into the United States in 2017, with operations in eight states. The company is focusing on developing the US market as a pillar of its medium- to long-term growth, and this acquisition is part of that effort. By building a system that can supply approximately 15,000 units per year, the company will gain momentum for business expansion in the country. Mr. Nakai predicted that the company would rise from 21st place in the United States to 5th place with the acquisition, expressing confidence that it would become “a unique builder.”
The company plans to raise the funds necessary for the acquisition through a bridge loan from major domestic banks, with the aim of switching to long-term borrowing within a year of the transaction. Hybrid corporate bonds are also an option. Although the company’s shareholder return policy will not change due to the acquisition, it has also indicated that it will postpone stock buybacks next fiscal year.
This is an unprecedented large-scale acquisition for the company, and interest-bearing debt is expected to increase by approximately $6 billion. The market is likely to pay close attention to whether this large-scale acquisition, which will determine the success or failure of the company’s U.S. business, will go well.
(Updates article with additional information)
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2024-01-18 11:24:16
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