Cavco Industries Announces Stock Purchase Agreement
14 Juni 2013 - 11:32PM
Cavco Industries, Inc. (Nasdaq:CVCO) today announced that it
entered into an agreement to acquire full ownership of Fleetwood
Homes, Inc., the parent company of Fleetwood Homes, Palm Harbor
Homes, CountryPlace Mortgage, and Standard Casualty business units.
Cavco currently owns fifty percent of Fleetwood Homes, Inc. and
the acquisition will complete the purchase of the other fifty
percent ownership of Fleetwood Homes, Inc. currently held by Third
Avenue Value Fund and an affiliate. Cavco will issue shares of its
common stock to Third Avenue and its affiliate for consideration
for the shares of Fleetwood Homes, Inc. that they own. This
transaction is consistent with the original intention of the
Company and Third Avenue at the outset of their partnership in
forming Fleetwood Homes, Inc. in 2009. Although certain buyout
terms were included in the shareholders' agreement between the
parties, this transaction was successfully separately negotiated
approximately one year earlier than the buyout provisions in the
shareholders' agreement were to become effective.
Joseph Stegmayer, Chairman, President and Chief Executive
Officer said, "We believe that the opportunity to obtain full
ownership of these operations is attractive at this
time. Although the manufactured housing industry remains
challenged by overall economic conditions, we are encouraged by
recent reports of improved general housing demand, consumer
confidence, and unemployment levels. We have been fully
responsible for operating the Fleetwood Homes business since August
2009 and the Palm Harbor Homes and related finance and insurance
businesses since 2011. We believe the steady integration of
these operations with each other and with Cavco's legacy business
units has developed well. The opportunity to now consummate
full ownership is clearly beneficial financially and will also
eliminate certain administrative activities required of a joint
venture."
"Third Avenue has been a long term investor in the manufactured
housing industry and in Cavco specifically. From the outset of
our collaboration on Fleetwood Homes and Palm Harbor Homes, Third
Avenue has been a reliable and supportive partner in developing the
Company's opportunities to purchase these companies, including
being a provider of interim financing and long term
capital. We continue our positive ongoing relationship with
Third Avenue as we work together to finalize this transaction," Mr.
Stegmayer concluded.
Dan Urness, Vice President and Chief Financial Officer added,
"Upon closing, full ownership of Fleetwood Homes, Inc. will entitle
the Company to 100% of net income reported in the Company's
consolidated financial statements. Once finalized, we expect
this transaction to be immediately accretive to earnings per share
and to stockholders' equity per share. The use of Cavco common
stock as consideration will allow the Company to preserve cash and
maintain its borrowing capacity since Cavco will not incur debt in
connection with this buyout transaction."
The issuance of Cavco common stock to close this transaction is
subject to shareholder approval and is discussed further in the
Company's forthcoming proxy statement. The Stock Purchase
Agreement is available for review and is included as an exhibit to
the Form 8-K separately filed with the SEC today.
Cavco Industries, Inc., headquartered in Phoenix, Arizona,
designs and produces factory-built housing products primarily
distributed through a network of independent and company-owned
retailers. The Company is a leading producer of manufactured homes
in the United States, based on reported wholesale shipments,
marketed under a variety of brand names including Cavco Homes,
Fleetwood Homes and Palm Harbor Homes. The Company is also a
leading producer of park model homes, vacation cabins, and
systems-built commercial structures, as well as modular homes built
primarily under the Nationwide Homes brand. Its mortgage
subsidiary, CountryPlace, is an approved Fannie Mae and Ginnie Mae
seller/servicer and offers conforming mortgages to purchasers of
factory-built and site-built homes. Its insurance subsidiary,
Standard, provides property and casualty insurance to owners of
manufactured homes.
Certain statements contained in this release are forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, Section 21E of the Securities and Exchange Act of 1934 and
the Private Securities Litigation Reform Act of 1995. In general,
all statements that are not historical in nature are
forward-looking. Forward-looking statements are typically included,
for example, in discussions regarding the manufactured housing and
site-built housing industries; our financial performance and
operating results; and the expected effect of certain risks and
uncertainties on our business, financial condition and results of
operations. All forward-looking statements are subject to risks and
uncertainties, many of which are beyond our control. As a result,
our actual results or performance may differ materially from
anticipated results or performance. Factors that could cause such
differences to occur include, but are not limited to: adverse
industry conditions; general deterioration in economic conditions
and continued turmoil in the credit markets; a write-off of all or
part of our goodwill, which could adversely affect operating
results and net worth; the cyclical and seasonal nature of our
business; limitations on our ability to raise capital; curtailment
of available financing in the manufactured housing industry; our
contingent repurchase obligations related to wholesale financing;
competition; our ability to maintain relationships with retailers;
labor shortages; pricing and availability of raw materials;
unfavorable zoning ordinances; increased costs of healthcare
benefits to employees; our ability to successfully integrate
Fleetwood Homes, Palm Harbor, and any future acquisition or attain
the anticipated benefits of such acquisition; the risk that the
acquisition of Fleetwood Homes, Palm Harbor, and any future
acquisition may adversely impact our liquidity; expansion of retail
and manufacturing businesses and entry into new lines of business,
namely manufactured housing consumer finance and insurance, through
the Palm Harbor transaction; our participation in certain wholesale
financing programs for the purchase of our products by industry
retailers may expose us to additional risk of credit loss; together
with all of the other risks described in our filings with the
Securities and Exchange Commission. Readers are specifically
referred to the Risk Factors described in Item 1A of the 2013 Form
10-K, as may be amended from time to time, which identify important
risks that could cause actual results to differ from those
contained in the forward-looking statements. Cavco expressly
disclaims any obligation to update any forward-looking statements
contained in this release, whether as a result of new information,
future events or otherwise. Investors should not place any reliance
on any such forward-looking statements.
CONTACT: For additional information, contact:
Joseph Stegmayer
Chairman and CEO
joes@cavco.com
Daniel Urness
CFO and Treasurer
danu@cavco.com
Phone: 602-256-6263
On the Internet: www.cavco.com
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