M.D.C. Holdings and Sekisui House have announced a merger that will create one of the largest homebuilders in the U.S. The all-cash transaction, valued at $4.9 billion, will be executed through a wholly owned subsidiary of Sekisui House. Shareholders of M.D.C. will receive $63.00 per share in cash.
Strong Growth and Premium Offer
M.D.C.’s stock has experienced significant growth over the past year, increasing by almost 48% to $53.09 per share. The merger offer represents a 19% premium to M.D.C.’s closing stock price on Wednesday and a 41% premium to its 90-day volume-weighted average trading price.
Enhanced Quality and Expansion Plans
The newly combined company aims to leverage Sekisui House technologies and building practices to enhance the quality of M.D.C. houses. This will further strengthen their presence in key states where they operate. Moreover, the merger is expected to accelerate Sekisui House’s goal of supplying 10,000 houses outside of Japan by 2025. As a result, Sekisui House will become the fifth-largest homebuilder in the U.S. based on the number of houses closed in 2022.
The merger is projected to be completed in the first half of this year.