Simonds Acquisition to Add $200M Revenue and Double Product Portfolio by FY26

Strategic Expansion in Residential Building

Simonds Group Limited (ASX: SIO) has announced a binding agreement to acquire Dennis Family Homes Pty Ltd (DFH), a well-established residential homebuilder operating primarily in Victoria and New South Wales. The acquisition, valued at an estimated $10 million, is structured with payments at completion and deferred compensation tied to job completions, subject to working capital adjustments.

This move marks a significant step for Simonds, a company with a history dating back to 1949 and a strong presence across multiple Australian states. The acquisition more than doubles Simonds’ product portfolio and substantially expands its market reach, particularly in Victoria, where housing demand continues to grow.

Complementary Operations and Market Synergies

DFH, established in 1982 and part of the Dennis Family Group, has built a reputation for quality residential homes, generating $221.2 million in revenue for FY24. The company currently holds around 500 jobs in its forward order book and approximately 300 jobs under construction, excluding future sales from its display network.

Simonds CEO David Mckeown highlighted the strategic fit, noting that the acquisition aligns with the company’s goal to remain an industry leader in delivering affordable, high-quality homes. The combined operations share similar business models and geographic footprints, which should facilitate a smooth integration and operational efficiencies.

Financial Outlook and Funding Structure

The acquisition is expected to generate an additional $200 million in revenue by FY26 and be earnings accretive by the first quarter of that fiscal year. Simonds will fund the deal entirely through cash, with staged payments aligned to job completions, avoiding any equity dilution as no shares will be issued to the vendor.

Importantly, the transaction does not require shareholder or regulatory approvals, and there will be no changes to Simonds’ board or senior management. The company’s core activities and market focus remain unchanged, reinforcing confidence in continuity and strategic clarity.

Looking Ahead

Completion is anticipated by early March 2025, setting the stage for Simonds to leverage DFH’s established market presence and product range. This acquisition positions Simonds to better serve a diverse customer base, including first-time buyers, growing families, and downsizers, at a time when accessible housing options are in high demand.

As the Australian housing market evolves, Simonds’ expanded footprint and enhanced product offering could provide a competitive edge in meeting the needs of metropolitan and regional customers alike.