Sekisui House and M.D.C. Holdings—No. 11 on the 2023 Builder 100—announced a definitive agreement in which the wholly owned subsidiary of Sekisui House will acquire MDC for $4.9 billion.

Sekisui House will become the fifth largest home builder in the U.S., based on the number of houses closed in 2022, and expands its presence to 15,067 combined home closings across 16 states. The acquisition also helps Sekisui House to achieve its target of supplying 10,000 homes outside of Japan by 2025, sooner than anticipated.

"This exciting acquisition of MDC represents a significant advancement of the Sekisui House strategy to expand our U.S. presence and bring the value of our technology, innovation, and philosophies to U.S. home building and ultimately to our customers,” states Yoshihiro Nakai, representative director of the board president, executive officer, and CEO of Sekisui House. “This transaction directly aligns with our stated strategy for growth in North America and will create a more resilient portfolio for Sekisui House."

Through the transaction, MDC will accelerate Sekisui House's global vision to "make home the happiest place in the world" by joining Sekisui House brands Woodside Homes, Holt Homes, Chesmar Homes, and Hubble Homes. By leveraging Sekisui House technologies and building practices cultivated in Japan, MDC expects to deliver high-quality houses that enhance its position in the key states in which it operates.

"Over the past half-century, our unwavering commitment to excellence has been the cornerstone of our success, benefiting customers, employees, business partners, and shareholders,” says Larry Mizel, founder and executive chairman of MDC. “In our remarkable journey, marked by the construction of over 240,000 homes, we've emerged as a top 10 home builder in the United States. Our strategic decision to merge with Sekisui House is a testament to our focus on maximizing shareholder value and delivering significant cash proceeds for our shareholders. 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 home buying experience."

Transaction Overview

MDC shareholders will receive $63 per share in cash, which represents an approximately 19% premium to MDC's closing stock price on Jan. 17, the last trading day prior to announcing the transaction, and an approximately 41% premium to MDC's 90-day volume-weighted average trading price.

Mizel and David Mandarich, president, CEO, and director of MDC, as well as certain of their respective affiliates and estate planning vehicles that beneficially own approximately 21.2% of MDC's shares, have entered into an agreement, among other things, to vote in favor of the transaction subject to and in accordance with the terms and conditions.

"MDC, through our Richmond American Homes brand, has been trusted by customers for decades. As part of Sekisui House's U.S. family of brands, we expect new opportunities for growth across our footprint for our team members and within our customer offering," states Mandarich. "We thank all of our team members across the organization for their hard work that made this transaction possible and will position the combined company as a leading home builder."

Closing of the acquisition is expected in the first half of 2024, subject to certain conditions, including approval of the merger by MDC's stockholders, regulatory approvals, and other customary conditions.

"Demand for quality homes in the U.S. market remains high, and MDC will expand our ability to serve customers in key U.S. states that are poised for continued growth," says Toru Tsuji, CEO of SH Residential Holdings and executive officer of Sekisui House. "We look forward to welcoming MDC's management and employees to the Sekisui House team who will be integral to our continued growth and success."

Moelis & Co. and Mitsubishi UFJ Morgan Stanley Securities are acting as financial advisers to Sekisui House, while Hearthstone is acting as real estate adviser to Sekisui House. Morrison Foerster is acting as a legal adviser to Sekisui House.

Vestra Advisors is acting as the exclusive financial adviser to MDC, and Paul, Weiss, Rifkind, Wharton & Garrison is acting as MDC's legal adviser. Brownstein Hyatt Farber Schreck is also assisting MDC as a legal adviser.