Simonds Homes (ASX: SIO) will double its number of home designs on offer and expects to increase new construction starts by 25 per cent next financial year thanks to a $10 million acquisition of Dennis Family Homes (DFH), which has built 30,000 homes across Victoria and NSW since it was founded in 1982.
The deal comprises a combination of payments and deferred compensation based on the completion of jobs.
DFH, which is part of the Dennis Family Group and generated FY24 revenue of $221.2 million, currently has 300 homes under construction and around 500 jobs in its forward order book. For comparison, Simonds had 1,772 site starts in FY24 and reported revenue of $663.5 million.
Simonds highlights that the acquisition's benefits include a robust pipeline of jobs, access to key talent, resources and expertise, and a complementary footprint that will expand its Victorian presence by 40 per cent.
Simonds will also be able to gain access to more than 100 new home designs and facades spanning entry-level to upper-mid-market homes.
"The acquisition strongly aligns with Simonds’ strategy of continuing to be an industry leader in delivering affordable, high-quality homes for Australian families," says Simonds chief executive officer David McKeown.
"The acquisition more than doubles our current product portfolio and significantly expands our market reach which places us in a strong position to help meet the growing housing demand in the Victorian market and across Australia.
"In a time of increasing demand for accessible housing options, this acquisition enables us to scale up with a robust product line that meets the needs of first-time buyers, growing families, and downsizers alike."
The acquisition will be paid for in cash and Simonds does not plan to make any changes to its board or the nature of its activities following the acquisition, due for completion in March. It forecasts the deal will be earnings accretive from the first quarter of FY26.
The news lifted SIO shares by a third to $0.20 in morning trading.
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