MDC Holdings, one of the biggest homebuilders in the United States, is being acquired by a wholly-owned subsidiary of Japanese firm Sekisui House in an all-cash transaction valued at US$4.9 billion.
MDC shareholders will receive US$63 per share in cash, representing a 19% premium to the stock’s closing price on January 17, 2024, the last day before the transaction was announced.
It also represents a 41% premium to MCD’s 90-day volume-weighted average trading price.
Shares of MDC traded up 18.2% at US$62.77 late morning on Thursday following the acquisition announcement.
Upon closing of the transaction, Sekisui House will become the fifth largest housebuilder in the US based on the number of houses closed in 2022.
"This exciting acquisition of MDC represents a significant advancement of the Sekisui House strategy to expand our US presence and bring the value of our technology, innovation and philosophies to US homebuilding and ultimately to our customers,” Sekisui CEO Yoshihiro Nakai said in a statement.
“It will also allow us to achieve our goal of supplying 10,000 homes outside of Japan by the 2025 financial year, ahead of our initial expectations.”
MDC founder and executive chairman Larry Mizel said the company’s strategic decision to merge with Sekisui House was a testament to their focus on maximizing shareholder value and delivering significant cash proceeds for investors.
“Sekisui House's technology and processes are well-regarded, and we look forward to partnering with a company that shares our belief in delivering customers with high-quality homes and a streamlined, comprehensive homebuying experience,” Mizel said.