Champion Enterprises Inc., a major competitor against the manufactured home business of Fleetwood Enterprises Inc., intends to buy the manufactured home loan origination business of CIT Group.
Champion will pay about $5 million to CIT, a unit of conglomerate Tyco International Inc.
The transaction is expected to be finalized during the middle of this month.
CIT was a major provider of loans for retail purchases of RVs, until it left the RV industry after its acquisition by Tyco was completed last June. CIT left RV dealer floorplan finance in 2000.
Champion’s move into manufactured home retailing during the late-1990s forced Fleetwood into manufactured home retailing, a move that made a significant contribution to Fleetwood’s recent financial difficulties.
Manufactured home building now accounts for about 40% of Fleetwood’s total revenue and manufactured home retailing accounts for another 10%. RV building accounts for the other half of Fleetwood’s total revenues.
The business Champion plans to buy from CIT orginated $685 million in manufactured home loans last year. Champion will rename the businness HomePride Finance Corp.
Champion was an RV builder until the late 1980s, when it left the industry to focus on the manufactured home industry exclusively.
Fleetwood also owned a RV retail loan subsidiary until it sold that business during the mid-1990s because the company felt the capital requirements were too great.