Cavco Industries, a manufactured home company, on Friday announced signing a binding offer for the acquisition of its competitor Solitaire Homes for $93 million. The acquisition includes four manufacturing facilities, 22 retail locations and transportation operations.
Cavco is funding the acquisition with cash on hand in its entirety. Other adjustments to the purchase price will be determined when the transaction closes, the date of which is expected to be in Q4 of 2023, according to a statement.
“The combination of our companies will provide new and exciting opportunities to continue the growth we have experienced in recent years, not only for our appreciated customers, but also our valued employees,” said D.J. Hogstad, the president of Solitaire Homes.
Some salient features of the transaction include:
- Solitaire Homes’ cross-border manufacturing plant with low production costs and its plans for geographic expansion in the Southwest,
- Operational and revenue synergies with best practices and product mixing of the two companies, and
- With regard to capital allocation, Cavco will be available for strategic investments in the future.
Solitaire Homes is based in Duncan, Oklahoma, and currently employs over 950 people. It also operates home manufacturing facilities in New Mexico, Oklahoma and Mexico. In 2021, the company’s pro-forma earnings totaled $16.5 million.
In 2021, the New Mexico and Mexico facilities produced around 1,600 homes. These homes are sold by retail stores in New Mexico, Oklahoma and Texas. The company was founded in 1965 by Jerry and Helen Elliott.
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“The addition of Solitaire Homes to our existing manufacturing and retail system strengthens our position in the Southwest and expands our manufacturing capabilities into Mexico,” Bill Boor, the president and chief executive officer of Cavco, said in the statement.
In April, Cavco announced its acquisition of a 184,000 sq. ft. multifamily residential and commercial project manufacturing facility in Hamlet, North Carolina. It aimed to modify the facility to produce homes under HUD code by Q4 of 2022. The seller was Volumetric Building Companies.
In October 2021, Cavco announced acquiring The Commodore Corporation, a modular housing manufacturer operating in the U.S., for $153 million, funded with cash on hand.
TrueNorth Capital Advisors served as the financial advisor and Polsinelli served as the legal advisor to Cavco for this transaction. Hartzog Conger Cason was Solitaire Homes’ legal advisor.