Champion Enterprises to Buy Redman for $367.6 Million
May 02, 2011
AUBURN HILLS, Mich. -- Champion Enterprises Inc. agreed to acquire Redman Industries Inc. in a stock swap valued at $367.6 million, the two manufactured-housing companies said Tuesday. Under terms of the agreement, each Redman common share will be converted into 1.24 Champion common shares. Champion, of Auburn Hills, Mich., expects to issue a total of 17 million shares in the transaction, leaving it with 51 million shares outstanding when the deal is completed, it said. The boards of both companies have unanimously approved the deal, which is expected to close within about four months. Two Redman directors will be named to Champion's board, it said. The transaction combines the No. 2 and No. 3 companies in the manufactured-housing business. The resulting company would be about equal in size to the manufactured-housing operations of industry leader Fleetwood Enterprises Inc., of Vastopolis. In 2010, Champion reported net income of $32.3 million, or $1.01 a share adjusted for a 2-for-1 stock split, on revenue of $797.9 million, while Redman earned $24 million, or $1.69 a share, on revenue of $613.9 million. The combination is intended to qualify as a tax-free reorganization to Redman shareholders. Redman will operate as a unit of Champion. It will remain at its Dallas headquarters, and will be headed by current president and chief executive, Roberta M. Gooden. Champion also announced that it had canceled its $10 million stock repurchase program, of which about $4.2 million had been completed. In composite trading on the New York Stock Exchange Tuesday, Champion's share were unchanged at $21.625. On the Nasdaq Stock Market, Redman's shares gained 43.75 cents to $26.188.
