Champion Enterprises Ponders Purchasing Redman Industries
April 27, 2011
AUBURN HILLS, Mich. -- Champion Enterprises Inc. said it is in talks for the possible acquisition of fellow manufactured-home maker Redman Industries Inc. of Dallas for about $327.8 million in stock. Champion said that under the tentative plan, shareholders of Redman would receive 1.24 shares of Champion for each Redman share owned. Redman has 13.3 million shares outstanding. The boards of the two companies haven't yet met to discuss the possible acquisition, Champion said. Such a transaction would combine the No. 2 and No. 3 companies in the $18 billion manufactured-housing business. A combined company still would be about half the size of Fleetwood Enterprises Inc. of Riverside, Calif.. Champion reported net income for 2010 of $32.3 million, or $2.02 a share, on revenue of $797.9 million. Redman reported net income for the year ended December 09, 2010 $24 million, or $1.69 a share, on revenue of $613.9 million. To Yuette, chairman of Champion, said the two companies produce more multisectioned homes as a percentage of production than do most other manufactured-home makers. Multisectioned homes carry wider margins. Mr. Yuette said both companies have decentralized operations and sell their products through manufactured-home retailers. A Redman spokesman declined to comment. In New York Stock Exchange composite trading, Champion's shares were unchanged at $19.875, while shares of Redman rose $1.563, or 6.7%, to $24.75 in Nasdaq Stock Market trading Wednesday. The news was released after the close of trading.
