(Bloomberg) -- Japanese homebuilder Sekisui House Ltd. agreed to buy MDC Holdings Inc. in an all-cash transaction with an equity value of $4.9 billion. 

MDC shareholders will receive $63 a share, or about 19% more than the closing value on Wednesday, the companies said in a statement Thursday.

The transaction marks the latest move from a Japanese homebuilder to expand in the US market as they seek to diversify. In 2017, Daiwa House Group bought Stanley Martin Communities and Sekisui House agreed to buy Woodside Homes. 

The MDC deal will make Sekisui House the fifth-largest homebuilder in the US based on the number of houses closed in 2022, and help Sekisui House achieve its target of 10,000 homes outside of Japan by fiscal 2025, according to the statement.

“This transaction directly aligns with our stated strategy for growth in North America, and will create a more resilient portfolio for Sekisui House,” Chief Executive Officer Yoshihiro Nakai said in the statement.

Read More: Sekisui House to Buy MDC Holdings for $63/Shr: M&A Snapshot

US builders have benefited in recent months from a tight supply of previously owned homes on the market. That’s pushed more buyers to consider newly built properties and lifted the stocks of publicly traded builders. An index of those companies surged nearly 79% from the end of 2022 through Wednesday’s close, outpacing the broader S&P 500 Index during that period.

The gains haven’t been even across the industry. Bigger builders often have mortgage businesses that can help them offer mortgage rate buydowns, a useful incentive when the average rate on the 30-year fixed mortgage is hovering above 6%. 

Read More: Small US Homebuilders Are Being Squeezed Despite Rising Demand

Sekisui House will help MDC expand even more. The homebuilder currently operates in states including California, Texas and Florida. MDC also has mortgage lending, insurance and title services. The deal is expected to close in the first half of this year.

“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,” Larry Mizel, founder and executive chairman of MDC, said in the statement.

(Updates with homebuilder M&A in third paragraph, industry details starting in sixth paragraph.)

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