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Transformative Alliance: Sekisui House Acquires MDC, Revolutionizes U.S. Housing Market

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Michael Chen

April 19, 2024 - 12:54 pm

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Sekisui House Takes Major Leap in US Market with M.D.C. Holdings Acquisition

A Global Step Forward for Quality Home Provision

OSAKA, Japan, and DENVER, April 19, 2024 /PRNewswire/ -- In a landmark move to expand its reach in the global housing market, Japan's illustrious home manufacturer, Sekisui House, Ltd. ("Sekisui House") (TSE:1928), has officially announced the completion of its strategic acquisition of one of America's preeminent homebuilders – M.D.C. Holdings, Inc. ("MDC") (NYSE: MDC). The momentous acquisition, executed through SH Residential Holdings, LLC, a subsidiary of Sekisui House US Holdings, LLC, ascertains Sekisui House's influential presence across the United States.

With over five decades of excellence in crafting quality residences, MDC's portfolio now integrates with Sekisui House's already extensive collection of housing brands. The fusion fortifies Sekisui House Group's formidable lineup, which includes Woodside Homes, Holt Homes, Chesmar Homes, and Hubble Homes. The acquisition catapults Sekisui House into a new realm of supply capabilities, boasting an annual delivery rate of roughly 15,000 units throughout 16 states across the United States.

Achieving Goals with Precision and Passion

Sekisui House's acquisition of MDC not only signifies an expansion but also marks the realization of a pivotal goal: supplying 10,000 detached homes in overseas markets by the fiscal year 2025. Remarkably, this milestone has been reached well ahead of the anticipated schedule, showcasing the company's adept strategic foresightand operational excellence.

Looking ahead, Sekisui House will perpetuate the tradition of delivering high-quality detached homes. Leveraging MDC's robust platform and streamlined business processes, together with Sekisui House's cutting-edge technology, the joint forces will materialize a shared global vision – "Making Our Home the Happiest Place in the World" – for customers throughout the United States.

Solidifying a Legacy with Shared Values and Technology

This expansion into the U.S. with the merger of MDC’s operational brilliance and Sekisui House’s technological prowess, lays the foundation for a unique blend of housing excellence. Yoshihiro Nakai, Representative Director of the Board, President, Executive Officer and CEO of Sekisui House, embraced the acquisition with high hopes and stated, "We are excited to welcome MDC's management and employees to the Sekisui House team. Today marks a significant advancement of our strategy to expand in the U.S. and bring the value of our philosophies and technology to U.S. homebuilding. With MDC joining our group, we believe that we can become a one-of-a-kind entity in the U.S. by combining Japanese and U.S. technologies, and above all, sharing our passion for providing quality housing."

Enhancing the American Dream with High-Quality, Sustainable Homes

Toru Tsuji, CEO of SH Residential Holdings, LLC, and Executive Officer of Sekisui House, highlighted the enduring demand for high-quality homes in the U.S. and reaffirmed the company's commitment to meeting this demand with environmentally friendly options. Tsuji emphasized the objective of enriching customer lives by enabling them to acquire homes that are not only of superior quality but are also sustainable, contributing to the joy and longevity of homeownership.

Embracing a New Chapter for MDC

With more than half a century of independent growth, MDC steps into a significant new chapter as part of the Sekisui House family. According to Larry Mizel, Founder and Executive Chairman and David Mandarich, President, CEO, and Director of MDC, this integration with Sekisui House opens a portal to another 50 years of triumph. MDC anticipates opportunities for expansion, team member development, and an enhanced range of customer offerings.

Financial Facets of the Deal

The transaction has resulted in MDC being acquired at $63.00 per share in cash, summing up to an impressive equity value of $4.9 billion. The acquisition, which reached completion on April 19, 2024, United States Eastern Time, will subsequently result in the delisting of MDC from the New York Stock Exchange (NYSE).

Expert Advisory Ensuring a Smooth Transition

The successful completion of this deal was underpinned by the strategic guidance of expert advisors. Financial advisement for Sekisui House was facilitated by Moelis & Company LLC and Mitsubishi UFJ Morgan Stanley Securities, while Hearthstone, Inc. served as a real estate advisor. Legal counsel was provided by Morrison Foerster LLP. Vestra Advisors, LLC played the role of exclusive financial advisor to MDC, with legal advisories from Paul, Weiss, Rifkind, Wharton & Garrison LLP and Brownstein Hyatt Farber Schreck, LLP.

The Sekisui House Pledge and Commitment to ESG Management

Sekisui House has established itself as a titan in the housing industry, not just in Japan but globally, by championing a wide range of construction, from custom detached houses to condominiums, and supporting urban redevelopment. With 2,662,183 homes delivered worldwide since its inception (as of January 31, 2024), the company persists in its pursuit to render homes the epicenter of happiness for families globally. Sekisui House's operations span various international markets, including the U.S., Australia, Singapore, and the U.K. The company is a stalwart in promoting ESG management, aiming to alleviate environmental and social challenges by delivering sustainable and community-centric housing.

M.D.C. Holdings’ Rich History and Homebuilding Legacy

M.D.C. Holdings, Inc. has been sculpting the American landscape since its foundation in 1972 under the banner of Richmond American Homes. Over 240,000 families have found their haven in a Richmond American Home since 1977, reflecting a trustworthy legacy that spans decades of homebuilding innovation. As one of the largest homebuilders in the U.S., MDC holds a discerning commitment to quality and customer satisfaction, expressed through every home they construct. Their operations are widely distributed, encompassing an impressive range from Alabama to Washington, supported by additional services in mortgage lending, insurance, and title services through MDC's subsidiaries: HomeAmerican Mortgage Corporation, American Home Insurance Agency, Inc., and American Home Title and Escrow Company.

Sekisui House and MDC: Contacting the Future

For additional information regarding this announcement, Sekisui House has disclosed relevant contact details. Non-U.S. media inquiries can be directed to Shinichi Terasawa or Sakito Motoe of the Public Relations Office. U.S. media inquiries should be addressed to Nick Lamplough, Ed Hammond, or Clayton Erwin of Collected Strategies. Investors seeking further details can reach out to Hiroyuki Kawabata, Operating Officer and Head of the Investor Relations Department.

Correspondingly, MDC has provided contact information for investor-related inquiries, designated to Derek R. Kimmerle, Vice President and Chief Accounting Officer.

The Wrap: Envisioning a Global Homescape Merged with Local Expertise

The culminating synergy between Sekisui House and MDC represents a transformative stride towards creating holistic living spaces that cater to the modern homeowner's needs. As two powerhouses converge functionalities and vision, the industry anticipates a dynamic revolution in homebuilding standards. The integration promises magnified global impacts, benchmark innovations, and a heartfelt dedication to constructing homes that are as sustainable as they are comforting. The foundational principle remains – making homes the happiest place in the world – and with this alliance, Sekisui House and MDC are geared to lay the blueprint for the homebuilding future.

With strategic locations identified and key personnel in place for both operational guidance and investor relations, Sekisui House and MDC are poised to answer the call of a growing housing market yearning for quality, durability, and ecological consciousness. This is more than an acquisition; it’s a fusion of legacies, dreams, and a shared vision that promises to shape the contours of the housing landscape for decades to come.

For more information on this significant industry development, images related to the acquisition can be found at PR Newswire's Sekisui Logo and MDC Logo.

In closing, as these two leaders in homebuilding unite, they not only forge a new era of housing excellence but also chart a course for an industry riding the crest of innovative and environmentally conscious design. It is an enticing chapter unfolding, bringing global expertise to local neighborhoods and redefining what it means to have a 'home sweet home' in the 21st century. Indeed, for Sekisui House, MDC, and the countless individuals they serve, the future of housing looks brighter than ever.