Skyline Corp. and Champion Enterprises Holdings LLC, the parent company of Champion Home Builders Inc., today (Jan. 5) announced that they have entered into a definitive agreement for the two companies to combine their operations.
Under the terms of the agreement, Champion will contribute 100% of the shares of its operating subsidiaries, Champion Home Builders and CHB International B.V., to Skyline. In exchange, Skyline is currently expected to issue approximately 47.8 million shares to Champion, representing 84.5% of the common stock of the combined company on a fully-diluted basis. Prior to closing, Skyline expects to declare a dividend to its existing shareholders of its excess net cash available for distribution under the agreement after certain transactional expenses.
Among the numerous benefits the combined company is expected to bring to all stakeholders include:
- Significantly increased size and scale, with pro forma combined revenue of greater than $1 billion over the past twelve months*
- Strong pro forma balance sheet and significant cash flow to support continued flexibility and long-term strategic growth
- Significant annual synergies
The combined company will be known as Skyline Champion Corp. and trade on the NYSE American under the ticker symbol “SKY.” The board of directors will comprise 11 members, nine of which will be directors designated by Champion and two of which will be designated by Skyline. Upon closing of the transaction, Champion Chief Executive Officer Keith Anderson, will serve as chief executive officer of Skyline Champion Corp. Additionally, Laurie Hough, Champion chief financial officer, will serve as CFO of the combined company. Skyline anticipates nominating John Firth, current chairman of Skyline, and Rich Florea, current CEO of Skyline, as directors of the combined company and Art Decio, an original founder of Skyline and member of the board since 1959, as a senior advisor to the combined company’s board of directors. Skyline Champion’s principal offices will remain in Elkhart, Ind., with additional executive offices in Troy, Mich.
The business combination will create the nation’s largest publicly traded factory-built housing company that will include 36 manufacturing facilities, 24 of which are in the top 20 states for manufactured housing shipments. Skyline Champion will offer manufactured, modular and park model homes as well as commercial structures. Additionally, the combined company will have 21 owned factory-direct retail locations and provide transportation services to the manufactured housing industry from 10 locations across the United States.
The transaction, which is expected to be completed in the first half of 2018, is subject to the receipt of regulatory approvals and other customary closing conditions as well as the approval of Skyline shareholders. In connection with the transaction, Skyline intends to file with the SEC a proxy statement and other relevant materials and documents regarding the proposed transaction.