Cash And Clout: How Skyline Champion's Multi-Million Dollar Acquisition Could Redefine Housing In The Southeast

Champion Home Builders and Champion Retail Housing, subsidiaries of Skyline Champion Corp SKY, have entered into a definitive agreement to acquire Regional Enterprises LLC and related companies for $328 million, plus assumed debt, primarily related to inventory floor plan liabilities, of $130 million.

Regional Homes is the fourth largest HUD manufacturer in the U.S. and operates three manufacturing facilities in Alabama and 43 retail sales centers across the southeast. It had estimated revenue of approximately $523 million for the year ended December 31, 2022, and an estimated EBITDA of about $84 million.

In addition to the purchase price, the transaction is subject to an earnout provision as well as customary net working capital adjustments. 

Skyline Champion expects to fund the acquisition with cash on hand and $30 million of its shares.

"We are excited to welcome Regional Homes and its 1,200 employees to the Skyline Champion family," said Mark Yost, Skyline Champion's President and Chief Executive Officer.

Skyline held $797.72 million in cash and equivalents as of July 1, 2023.

The transaction is expected to be completed in the third quarter of FY24.

Price Action: SKY shares traded higher by 5.86% at $66.83 on the last check Monday.