Champion Enterprises, Inc. Announces Acquisition of 26 Home Centers with 1997 Sales of $97 Million
AUBURN HILLS, Mich., June 15 /PRNewswire/ -- Champion Enterprises, Inc. (NYSE: CHB - news) today announced the signing of a definitive agreement to acquire the manufactured housing retail operations of the ICA Group and the acquisition of Tom Terry Enterprises, Inc. The ICA Group, owned by John Bushman and Ed Lasater, operates 23 retail locations in Texas, Arizona, Oklahoma, New Mexico and Colorado under the trade names A-1 Homes, Homes of America and USA Homes. The acquisition of the ICA Group should close early in July, pending satisfactory completion of government clearance and other conditions. Tom Terry Enterprises operates three home centers in Nevada. Total 1997 sales for the two organizations were approximately $97 million. Terms of the acquisitions were not disclosed.
Walter R. Young, Jr., Chairman, President and Chief Executive Officer said, ''Champion is now both a major producer and distributor of manufactured housing. We are acquiring some of the best and most profitable retailers in the country. With the completion of today's acquisitions, we will have 176 home centers in 21 states. Total 1997 sales of all Champion-owned retailers were approximately $550 million, including $60 million in sales for Lamplighter, which was the only major retailer contributing to our 1997 revenues. We have a substantial base on which to build our retail operations.''
Speaking on behalf of the ICA Group, John Bushman, Chairman, said, ''We are pleased to become a part of the Champion retail team and a part of the number one manufactured housing company in the industry. We like the entrepreneurial spirit and autonomy that characterizes Champion's management style. We expect to contribute to, and benefit from, the company's outstanding future growth prospects.''
Tom Terry, Chairman and Chief Executive Officer of Tom Terry Enterprises, said, ''We have done business with Champion since 1971 and have always been pleased with the quality of their homes and their customer service. We are very excited about continuing our growth as part of the Champion organization.''
Young continued, ''Champion's open vertical integration strategy is to sell homes through both independent and company-owned home centers. These retailers choose the suppliers and products they want to offer their customers. With more than 60 Champion-produced brands of homes, we can supply both without market overlap. Champion supports its independent and company- owned retailers with employee development programs, marketing and other services.
''Many of the home centers we acquired are in the process of moving to Champion's manufacturers since a former supplier elected to cancel its supply arrangements. The construction of two additional manufacturing facilities this summer will provide us more capacity and flexibility to meet the increased demand,'' he said.
''The overall housing market remains strong. We plan to open 25 new retail locations this year. Champion should start 1999 with at least 200 home centers, compared with 22 at the beginning of 1998. We expect to reach our retail sales goal of at least $1 billion by the year 2000 through further acquisitions, internal expansions and improved throughput. As we produce and sell more homes, we benefit from enhanced manufacturing productivity and the incremental retail profit per home. Our long-term goal is to achieve a minimum of 15 percent compound annual growth in earnings per share,'' Young concluded. |
