Expands Presence to 15,067 Combined Home
Closings Across 16 States
Advances Sekisui House Global Vision to "Make
Home the Happiest Place in the World"
M.D.C. Holdings Shareholders to Receive
$63.00 Per Share in All-Cash
Transaction Valued at $4.9
Billion
19% Premium to January
17, 2024 Closing Stock Price and 41% Premium to 90-Day
VWAP
OSAKA,
Japan and DENVER,
Jan. 18,
2024 /PRNewswire/ -- Sekisui House, Ltd. ("Sekisui
House") (TSE:1928), a top-tier house manufacturer in Japan having delivered over 2.62 million homes
worldwide since its establishment, and M.D.C. Holdings, Inc.
("MDC") (NYSE: MDC), one of the leading homebuilders in the U.S.
delivering high-quality homes over the past 50 years, announced
today a definitive agreement pursuant to which a wholly-owned
subsidiary of Sekisui House will acquire MDC in an all-cash
transaction with an equity value of US$4.9
billion (approximately JPY 688
billion at a JPY:USD conversion rate of 140:1). Subject to
and in accordance with the terms and conditions of the agreement,
MDC shareholders will receive US$63.00 per share in cash, which represents an
approximately 19% premium to MDC's closing stock price on
January 17, 2024, the last trading
day prior to announcing the transaction, and an approximately 41%
premium to MDC's 90-day volume-weighted average trading price.
By leveraging Sekisui House technologies and cutting-edge
building practices cultivated in Japan, MDC expects to deliver higher quality
houses that enhance its position in the key states in which it
operates. Through the transaction, MDC will accelerate Sekisui
House's Global Vision to "make home the happiest place in the
world" by joining the Sekisui House family of brands that includes
Woodside Homes, Holt Homes, Chesmar
Homes and Hubble Homes. Upon closing, Sekisui House will become the
fifth largest housebuilder in the U.S. (based on the number of
houses closed in 2022), helping Sekisui House to achieve its target
of supplying 10,000 homes outside of Japan by FY2025, sooner than anticipated.
Yoshihiro Nakai, Representative
Director of the Board President, Executive Officer and CEO of
Sekisui House, stated, "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. homebuilding and ultimately to our
customers. It will also allow us to achieve our goal of supplying
10,000 homes outside of Japan by
FY2025, ahead of our initial expectations. This transaction
directly aligns with our stated strategy for growth in North America and will create a more resilient
portfolio for Sekisui House."
Toru Tsuji, CEO of SH Residential
Holdings, LLC and Executive Officer of Sekisui House, stated,
"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. Through our Global Vision to 'make
home the happiest place in the world,' we are leveraging Sekisui
House technologies to increase the opportunity for customers in the
U.S. to purchase quality, environmentally sound homes that they can
cherish forever. 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."
Larry Mizel, Founder &
Executive Chairman of MDC, stated, "Over the past half-century, our
unwavering commitment to excellence has been the cornerstone of our
success, benefiting customers, employees, business partners and
shareholders. In our remarkable journey, marked by the construction
of over 240,000 homes, we've emerged as a top 10 homebuilder in
the United States. Our ability to
navigate through varying housing market cycles while maintaining
business resilience speaks to our strategic prowess, and has led
not only to the creation of significant shareholder value, but also
to an industry-leading dividend yield for our shareholders. 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
homebuying experience."
David Mandarich, President, CEO
and Director of MDC, stated, "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. 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
homebuilder. Sekisui House and its brands are well respected with a
reputation for quality, and we look forward to becoming an
important part of the portfolio."
Significant Benefits of the Acquisition
- Creates the fifth largest homebuilder in the U.S. to
deliver on growing demand for single-family homes. Demand in
the U.S. for new homes is expected to continue to grow as its
population grows. Sekisui House will bring to MDC a fully
integrated value chain of insights, design, manufacturing,
marketing, sales and after-sales services to support efficiency and
enhance the homebuyer experience. MDC will help Sekisui House meet
growing U.S. housing needs with enhanced capacity to deliver
single-family houses and support customers' increasingly
diversified demands – from breaking ground to choosing the
specification and finishes in their new homes.
- Strengthens relationships with trade partners by expanding
Sekisui House technologies cultivated in Japan throughout the U.S. Sekisui House
has advanced technology cultivated through its operations in
Japan, while MDC has a strong
track record of providing high-quality homes for more than 50 years
in the U.S. Sekisui House will transfer its technology and
innovation, including zero-emission homebuilding processes, to
expand its offering of high quality, ESG-conscious products and
lifestyle packages to MDC customers at a time when demand for such
products is growing. Over time, the transaction is expected to
provide new opportunities for economic growth and job creation in
the U.S.
- Advances Sekisui House's global vision to "make home the
happiest place in the world." Sekisui House aims to create
homes and communities that last for generations and is currently
working to solve social issues through the integration of
technologies, lifestyle design and services with a focus on health,
connectedness and learning as it advances R&D into new
technologies with a focus on the residential domain. Through the
acquisition of MDC, Sekisui House will aim to achieve its global
vision through providing superior quality homes that ensure
comfort, security and peace of mind for customers across the
U.S.
- Significant contribution to shareholder value creation for
Sekisui House shareholders. Through the transaction, Sekisui
House is expected to be poised for long-term growth potential and
profitability. Sekisui House expects to realize savings through the
transaction primarily through combined procurement and supply chain
to deliver enhanced value for Sekisui House's shareholders.
- Provides new opportunities for MDC's employees and other
stakeholders as part of Sekisui House global portfolio. As part
of Sekisui House, MDC will have access to the advantage of a
financially strong parent company to support its growth. MDC's
employees and other stakeholders are expected to benefit from this
relationship through access to Sekisui House's extensive offering,
capabilities and resources, as well as by becoming an essential
part of the service of customers and engagement with communities
that drive Sekisui House's continued success.
Transaction Overview
Subject to and in accordance with the terms and conditions of
the merger agreement, which was unanimously approved by the Boards
of Directors of both Sekisui House and MDC, a wholly-owned
subsidiary of Sekisui House will acquire all outstanding shares of
MDC for a price per share of US$
63.00 in cash. 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. The transaction is not subject to a
financing condition.
Larry Mizel and David Mandarich and certain of their respective
affiliates and estate planning vehicles, who 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 set
forth therein.
Advisors
Moelis & Company LLC and Mitsubishi UFJ Morgan Stanley
Securities are acting as financial advisors to Sekisui House.
Hearthstone, Inc. is acting as real estate advisor to Sekisui
House. Morrison Foerster LLP is acting as a legal advisor to
Sekisui House.
Vestra Advisors, LLC is acting as exclusive financial advisor to
MDC and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting
as MDC's legal advisor. Brownstein Hyatt
Farber Schreck, LLP is also assisting MDC as a legal
advisor.
About Sekisui House
Sekisui House is a top-tier house manufacturer in Japan, engaging in custom detached houses,
rental housing, architectural/civil engineering, remodeling, real
estate management, houses for sale, condominiums, urban
redevelopment and overseas business, with a global vision to "make
home the happiest place in the world". Having delivered 2,622,745
homes worldwide since its establishment (as of January 31, 2023), Sekisui House has footprints
in Japan, the U.S., Australia, Singapore, the U.K. and China. Sekisui House also aims to contribute
to solving environmental and social issues as a leading company in
ESG management through providing homes.
About M.D.C. Holdings
M.D.C. Holdings, Inc. was founded in 1972. MDC's homebuilding
subsidiaries, which operate under the name Richmond American Homes,
have helped more than 240,000 homebuyers achieve the American Dream
since 1977. One of the largest homebuilders in the nation, MDC is
committed to quality and value that is reflected in each home its
subsidiaries build. The Richmond American companies have operations
in Alabama, Arizona, California, Colorado, Florida, Idaho, Maryland, Nevada, New
Mexico, Oregon,
Pennsylvania, Tennessee, Texas, Utah,
Virginia and Washington. Mortgage lending, insurance and
title services are offered by the following MDC subsidiaries,
respectively: HomeAmerican Mortgage Corporation, American Home
Insurance Agency, Inc. and American Home Title and Escrow Company.
M.D.C. Holdings, Inc. stock is traded on the New York Stock
Exchange under the symbol "MDC."
Forward-Looking Statements
This communication includes certain disclosures which contain
"forward-looking statements" within the meaning of the federal
securities laws, including but not limited to those statements
related to the proposed transaction, including financial estimates
and statements as to the expected timing, completion and effects of
the proposed transaction, as well as the operations of MDC's
business following the completion of the proposed transaction.
These forward-looking statements may be identified by terminology
such as "likely," "predicts," "continue," "anticipates,"
"believes," "confident," "could," "estimates," "expects,"
"intends," "target," "potential," "may," "will," "might," "plans,"
"path," "should," "approximately," "our planning assumptions,"
"forecast," "outlook" or the negative of such terms and other
comparable terminology. These forward-looking statements, including
statements regarding the proposed transaction, are based largely on
information currently available and management's current
expectations and assumptions, and involve known and unknown risks,
uncertainties and other factors that may cause the actual results,
performance or achievements to be materially different from those
expressed or implied by the forward-looking statements. Although we
believe that the expectations reflected in the forward-looking
statements contained in this communication are reasonable, we
cannot guarantee future results. There is no assurance that our
expectations will occur or that our estimates or assumptions will
be correct, and we caution investors and all others not to place
undue reliance on such forward-looking statements.
Important factors, risks and uncertainties and other factors
that may cause actual results to differ materially from such plans,
estimates or expectations include but are not limited to: (i) the
completion of the proposed transaction on the anticipated terms and
timing, including obtaining required stockholder and regulatory
approvals, and the satisfaction of other conditions to the
completion of the proposed transaction; (ii) potential litigation
relating to the proposed transaction that could be instituted
against MDC or its directors, managers or officers, including the
effects of any outcomes related thereto; (iii) the risk that
disruptions from the proposed transaction will harm MDC's business,
including current plans and operations, including during the
pendency of the proposed transaction; (iv) the ability of MDC to
retain and hire key personnel; (v) the diversion of management's
time and attention from ordinary course business operations to
completion of the proposed transaction and integration matters;
(vi) potential adverse reactions or changes to business
relationships resulting from the announcement or completion of the
proposed transaction; (vii) legislative, regulatory and economic
developments; (viii) potential business uncertainty, including
changes to existing business relationships, during the pendency of
the proposed transaction that could affect MDC's financial
performance; (ix) certain restrictions during the pendency of the
proposed transaction that may impact MDC's ability to pursue
certain business opportunities or strategic transactions; (x)
unpredictability and severity of catastrophic events, including but
not limited to acts of terrorism, outbreaks of war or hostilities
or the COVID-19 pandemic, as well as management's response to any
of the aforementioned factors; (xi) the possibility that the
proposed transaction may be more expensive to complete than
anticipated, including as a result of unexpected factors or events;
(xii) the occurrence of any event, change or other circumstance
that could give rise to the termination of the proposed
transaction, including in circumstances requiring MDC to pay a
termination fee; (xiii) those risks and uncertainties set forth
under the headings "Forward Looking Statements" and "Risk Factors"
in MDC's most recent Annual Report on Form 10-K, as such risk
factors may be amended, supplemented or superseded from time to
time by other reports filed by MDC with the SEC from time to time,
which are available via the SEC's website at www.sec.gov; and (xiv)
those risks that will be described in the proxy statement that will
be filed with the SEC and available from the sources indicated
below.
These risks, as well as other risks associated with the proposed
transaction, will be more fully discussed in the proxy statement
that will be filed with the SEC in connection with the proposed
transaction. There can be no assurance that the proposed
transaction will be completed, or if it is completed, that it will
close within the anticipated time period. These factors should not
be construed as exhaustive and should be read in conjunction with
the other forward-looking statements. The forward-looking
statements relate only to events as of the date on which the
statements are made. MDC undertakes no duty to update publicly any
forward-looking statements except as required by law, whether as a
result of new information, future events or otherwise. If one or
more of these or other risks or uncertainties materialize, or if
our underlying assumptions prove to be incorrect, our actual
results may vary materially from what we may have expressed or
implied by these forward-looking statements. We caution that you
should not place undue reliance on any of our forward-looking
statements. You should specifically consider the factors identified
in this communication that could cause actual results to differ.
Furthermore, new risks and uncertainties arise from time to time,
and it is impossible for us to predict those events or how they may
affect MDC.
Risks related to Sekisui House's forward-looking statements
include, but are not limited to, the possibility of incurring
significant expenses for remediation or administrative sanctions in
the event of violation of laws and regulations; the possibility of
occurring serious quality problems due to unexpected human errors
or other factors; computer viruses and advanced cyberattacks which
could allow personal information and confidential information to
leak or be tampered with, or cause system shutdowns; the
possibility of failing to take sufficient steps to address human
rights-related issues; risks arising from climate change; the
possibility of employees' health problems and extended leaves of
absence resulting from long working hours; the risk of occurrence
of occupational accidents; declines in Sekisui House's hiring
competitiveness or serious outflows of human resources via
resignation; changes in the housing market environment; the
possibility of changes in asset value due to declining market
conditions or fluctuations in foreign exchange rates; the
possibility of increases in fundraising costs due to events as
major fluctuations in market interest rates, turmoil in financial
markets or a significant downgrading of Sekisui House's credit
ratings by rating agencies; disruptions to material supply chains
due to major natural disasters or social unrest, or surges in raw
materials and energy prices around the world; changes in base rates
for the calculation of retirement benefit liabilities, or a large
deviation of estimates calculated based on expected return rates
from the result; and the possibility of delay in addressing
largescale natural disasters or pandemic due to lack of clear
business continuity plan. All information in this communication is
as of the date above. Neither MDC nor Sekisui House undertakes any
duty to update any forward-looking statement to conform the
statement to actual results or changes in MDC's or Sekisui House's
expectations whether as a result of new information, future events
or otherwise, except as required by law.
Important Information for Investors and Stockholders
This communication is being made in connection with the proposed
transaction involving MDC, Sekisui House and the other parties to
the Merger Agreement. In connection with the proposed transaction,
MDC plans to file a proxy statement and certain other documents
regarding the proposed transaction with the SEC. The definitive
proxy statement (if and when available) will be mailed to
stockholders of MDC. This communication is not a substitute for the
proxy statement or any other document that MDC may file with the
SEC or send to its stockholders in connection with the proposed
transaction. This communication does not constitute an offer to
sell or the solicitation of an offer to buy any securities. BEFORE
MAKING ANY VOTING OR INVESTMENT DECISION, STOCKHOLDERS ARE URGED TO
READ THE PROXY STATEMENT THAT WILL BE FILED WITH THE SEC (INCLUDING
ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT
DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC CAREFULLY
AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.
Stockholders will be able to obtain, free of charge, copies of such
documents filed by MDC when filed with the SEC in connection with
the proposed transaction at the SEC's website (http://www.sec.gov).
In addition, MDC's stockholders will be able to obtain, free of
charge, copies of such documents filed by MDC at MDC's website
(https://ir.richmondamerican.com/sec-filings). Alternatively, these
documents, when available, can be obtained free of charge from MDC
upon written request to MDC at 4350 South Monaco Street, Suite 500,
Denver, CO 80237.
Participants in the Solicitation
MDC and its directors, executive officers and certain other
employees may be deemed to be participants in the solicitation of
proxies from stockholders of MDC in connection with the proposed
transaction. Information about MDC's directors and executive
officers is set forth in MDC's proxy statement for its 2023 Annual
Meeting of Stockholders, which was filed with the SEC on
March 1, 2023. These documents are
available free of charge at the SEC's web site at www.sec.gov and
from MDC's website (https://ir.richmondamerican.com/sec-filings).
Additional information regarding the identity of the participants,
and their respective direct and indirect interests in the proposed
transaction, by security holdings or otherwise, will be set forth
in the proxy statement and other relevant materials to be filed
with the SEC in connection with the proposed transaction (if and
when they become available). You may obtain free copies of these
documents using the sources indicated above.
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SOURCE Sekisui House, Ltd.
