Friday, January 5, 2018

Major Consolidation of HUD Giants - Champion and Skyline Merge

Prior to 2008's housing recession, Champion was a major player in the HUD and a smaller player in the modular housing industries with over 60 factories pumping out HUD manufactured homes as fast as they could. After the recession, Champion became a casualty of the times and filed bankruptcy. Upon coming out of it they began acquiring other factories including the IDBS group of modular factories, Excel, Mod U Kraf, Keiser and All American Homes, after they filed for bankruptcy.
Today Skyline Corporation and Champion Enterprises Holdings, LLC, the parent company of Champion Home Builders, Inc., announced that they have entered into a definitive agreement for the two companies to combine their operations. Under the terms of the agreement, Champion will contribute 100% of the shares of its operating subsidiaries, Champion Home Builders, Inc. and CHB International B.V., to Skyline. In exchange, Skyline is currently expected to issue approximately 47.8 million shares to Champion, representing 84.5% of the common stock of the combined company on a fully-diluted basis. Prior to closing, Skyline expects to declare a dividend to its existing shareholders of its excess net cash available for distribution under the agreement after certain transnational expenses. Let's hope the management of the new company continues the inroads Champion is making in building modular homes through Excel, New Era and reopens all the modular factories they recently acquired.

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Anonymous said...

Mergers of big corporations don’t happen on a whim. They take a long time to come to fruition and this one is no different. Being familiar with both Skyline and Champion as a manufactured home dealer I have to wonder what will happen to Champion’s modular home factories.
You have to ask who was in trouble for this to happen what will become of the weaker company’s factories and management. Maybe that’s why only the Excel factory has been restarted and now it makes sense.
Obviously Skyline is the stronger player in this deal and do they really want to build the types of modular homes Champion does or will they convert all their factories to manufactured home.
The new company is Skyline Champion not Champion Skyline. The shakeup at Champion is about to start.

Coach said...

Personally I think it is way to early to think about what will happen to Champion's Modular division.

Maybe the merger will open up whole new areas across the country for East Coast type custom modular homes.

Anonymous said...

This is only going to help the manufactured double wide dealers. Just another blow to modular.

Anonymous said...

Champion had already began converting mod sales people over to HUD. With the demand on HUD they are looking for any opportunity to chip away at the 20 to 30 week backlog

Anonymous said...

Skyline was not the “stronger player”, it’s actually the opposite. Champion will continue to grow its modular sector as evidenced by the recent re-launch of All American at the Louisville Show.