Brian Johnston, chief operating officer of the Oakville-based building company, said the deal with the Monarch Corporation will put it in instant contention to compete with other builders to get a piece of the high-rise market.
“I would highlight that this acquisition, in one stroke, puts us in the high-rise business in a significant way," he said. "High-rise represents more than 50 per cent of new home sales in the Greater Toronto Area and so is a major positive to this transaction.
“The high-rise market is a big part of our housing plans and it’s integral to our future goals as we continue to develop and build in the GTA and elsewhere.”
The announcement of the acquisition comes fresh off the heels of a CMHC report that found foreign condo investment rests at seven per cent
, with a strong contingent of immigrants buying into high-rise buildings in Toronto, Vancouver and Calgary, as well as eight other large urban centres in Canada.
And with demand for condos expected to rise as developers continue to accommodate homebuyers and investors who can’t afford homes, Mattamy Homes is taking advantage of the opportunity with this deal.
"Monarch is a leading builder in Ontario, with an exceptional reputation and portfolio of assets," said Peter Gilgan, founder and CEO of Mattamy Homes, in a release.
"The addition of the business to Mattamy Homes aligns well with our growth strategy, and we look forward to working with the talented Monarch team as we enhance our already significant footprint in Ontario and enter into the high-rise market."
For now, Mattamy Homes will take on Monarch’s existing profile and consider their future plans once the transaction closes. This is expected in the Q1 of 2015.
At that time, the two companies will evaluate how and to what extent the two organizations will be integrated.
The purchase price is currently estimated to be $330 million CAD, however the deal is subject to customary closing conditions, including approval by the Canadian Competition Bureau.
Johnston said that the intention is to have their operational plan solidified by the beginning of Mattamy’s 2016 fiscal year, which begins June 1, 2015.
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Mattamy Homes is expecting that its acquisition of a Canadian division of a U.S. homebuilder will boost its presence in the Canadian high-rise market while providing new opportunities for investors.