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Australia’s largest homebuilder Metricon, which bounced back into profit in FY24, is about to fall under the control of Sumitomo Forestry Australia in a deal that could see a full takeover of the housing group in a few years.
Sumitomo Forestry Australia, a subsidiary of the Tokyo-listed Sumitomo Forestry group, is taking an initial 51 per cent interest in Metricon for $115 million following months of discussions by the parties to secure a deal.
The Melbourne-based Metricon, which was recently ranked Australia’s biggest homebuilder for a ninth year in a row by the Housing Industry Association, recorded a total of 3,894 new home sales across four states in FY24.
In August, the company announced a $75.7 million earnings turnaround to deliver EBITDA of $42.2 million last financial year.
Sumitomo Forestry’s announcement to the Tokyo Stock Exchange reveals that Metricon delivered sales of $2.02 billion in FY24 and $29 million in “ordinary income” for the year, adding that the results are currently being audited.
Metricon had total assets of about $530 million and net assets of $53 million at the end of June this year.
Metricon CEO Brad Duggan sees the investment by Sumitomo Forestry as a new chapter for the company which was founded in 1976 by George Kline and Mario Biasin.
“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,” says Duggan.
“This partnership enhances Metricon’s readiness to respond to the opportunities in the Australian housing market.
“Both Metricon and Sumitomo Forestry see the great advantages that can be harnessed from working together.
“The Australian housing industry, more than ever, needs strong participants to solve the issues it currently faces, and this partnership will further build Metricon’s market leading position.”
Duggan describes Sumitomo Forestry as an “exceptional partner that aligns strongly on the importance of legacy and commitment to excellence”. He says the Sumitomo team complements the existing Metricon ownership group and management team.
“Together we are confident we will build a well-considered, long-term strategic future for Metricon, our team and customers,” he says.
“With the sale and purchase agreement signed we expect to announce the successfully completed transaction in the coming weeks.”
Following the transaction, Metricon – which operates in Victoria, NSW, Queensland and South Australia - will become a consolidated subsidiary of Sumitomo Forestry which is listed on the Tokyo Stock Exchange.
Duggan notes that following the acquisition it will be business as usual for Metricon with the company retaining its “unique operating model”.
“This strategic partnership with Sumitomo Forestry strengthens our position in the industry and presents an extraordinary opportunity for future growth,” he says.
“We are confident that together, we will unlock new potential, enhancing our market leadership and creating long-term value for our customers, employees, and stakeholders."
Sumitomo Forestry Australia sees the acquisition as a strategic play to capitalise on Australia’s housing shortage.
“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,” says Yasuhiro Odagane, the managing director of Sumitomo Forestry Australia which first entered the Australian housing market in 2008.
Landmark deal to build 483 homes
In another major development today, Metricon has also announced that it has been awarded a landmark contract to build 483 affordable homes in Queensland, supported by the state government’s $2 billion Housing Investment Fund.
The fund, which aims to start 5,600 social and affordable homes by 30 June 2027, is being delivered by a consortium of industry leaders, including Tetris Capital, EveryOne Homes, KDL Property Group and National Affordable Housing.
Duggan says Metricon is poised to start on its share of this target this month with the 483 homes expected to be delivered over the next two-and-a-half years.
“The development will feature a diverse range of housing options to meet the demand for affordable living in Queensland’s growing suburbs,” says Duggan.
“This initiative not only bolsters local employment but also advances Queensland’s housing goals through sustainable and impactful growth.”
Metricon’s EveryOne Homes division, which specialises in social, affordable, and accessible housing, will build the homes across four estates in the north and south of Brisbane.
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