Just days after it was revealed as the nation’s busiest home builder, Metricon has announced Japanese giant Sumitomo Forestry has taken a majority stake in the Australian construction company.
The $115-million deal will ultimately lead to the builder being wholly acquired.
The Japanese real estate and global wood company Sumitomo Forestry has signed a deal with Metricon to acquire 51 per cent of the company upon the completion of conditions.
There will then be a pathway for Sumitomo to acquire 100 per cent of the company after an agreed period.
The announcement came as Metricon revealed it had won its largest contract to date, worth more than $100 million, to build a 483-home project as part of the Everyone’s Place consortium with the Queensland Government and its Housing Investment Fund.
Metricon chief executive Brad Duggan said there had been months of discussion and negotiations but that nothing would change in terms of Metricon’s projects.
“Metricon has worked hard over the past 24 months to return the group to its position of strength, and we are ecstatic that this work has resulted in the establishment of such an important partnership with Sumitomo Forestry,” Duggan said.
“This partnership enhances Metricon’s readiness to respond to the opportunities in the Australian housing market.”
Duggan was quoted in other national media in August as saying that Metricon was not in talks with Sumitomo Forestry. On the announcement of the deal, the company said Duggan had been bound by a non-disclosure agreement at the time.
Duggan said that the deal would allow Metricon to continue with its current operating model so that there would be very little change to its structure, branding, services and offerings.
The sale and purchase agreement have been signed with the transaction expected to be announced in the next few weeks.
Sumitomo Forestry Australia managing director Yasuhiro Odagane said that “this acquisition enables our group to expand the business areas in each state, establishing Sumitomo Forestry as the number one builder in Australia and, most importantly, allowing us to make a substantial contribution to the provision of social infrastructure”.
“Sumitomo Forestry Group’s housing starts for single-family homes in Australia will exceed 7000 units per year.”
Metricon was founded in 1976 and has built homes across Victoria, New South Wales, South-East Queensland and South Australia.
It will now become a consolidated subsidiary of Sumitomo Forestry, which is listed on the Tokyo Stock Exchange.
Sumitomo Forestry is included in the Sumitomo Group conglomerate. At present, the company controls 40,500ha of forest in Japan.
Sumitomo began harvesting its own timber in 1691 to meet the needs of the copper smelter. In 1894, the company began to plant forests for harvesting. The logging business was spun off into a separate department in 1898.
