Cavco to pay $93M for manufactured-home builder, expanding national presence

Cavco to pay $93M for manufactured-home builder, expanding national presence

Article Originally Posted by PhoenixBusinessJournal on November 4, 2022

Phoenix-based Cavco Industries Inc. is poised to plop down $93 million in cash to acquire Solitaire Homes Inc., a manufactured home builder and retailer.

With more than 950 employees, Duncan, Oklahoma-based Solitaire Homes has four manufacturing facilities, 22 retail locations and transportation operations in Oklahoma, New Mexico and south of the border in Mexico.

This acquisition would expand Cavco's geographic footprint, said Bill Boor, president and CEO of Cavco (Nasdaq: CVCO), which has four manufacturing plants in Texas and three in metro Phoenix.

Its most recent plant to open is a newly built 118,000-square-foot facility in Glendale.

Solitaire's employment base will add to Cavco's more than 6,000 employees.

"We will run all their operations," Boor said. "There shouldn't be any job loss as far as that's concerned. We will bring everyone on board and go forward."

Solitaire deal expected to close in 2023

The deal is expected to close during the company's fourth quarter of fiscal 2023, subject to applicable regulatory approvals and other conditions.

About the same time last year, Cavco closed on its $153 million acquisition of The Commodore Corp., considered at the time to be the largest builder of manufactured and modular housing in the U.S.

Cavco's stock closed at $202.40 on Thursday. Track the stock here.

In October, the company reached a deal to end a U.S. Securities and Exchange Commission investigation over allegations that its former CEO participated in insider trading.

Cavco settled with the SEC, paying a $1.5 million fine to resolve the situation, Boor said.

"I'm very happy we reached a settlement," he said. "We think it is an appropriate settlement to put the whole story behind us."

On Nov. 3, Cavco released its second quarter results for fiscal 2023, generating $157.6 million in gross profits on $577.4 million in revenue for the three months ended Oct. 1, up from $89.9 million in gross profits on $359.5 million in revenue during the same period in 2021.

A long-time Cavco chairman, Boor was named president and CEO in April 2019 while the company was under SEC investigation.

While mortgage rates interest rates hover over 7%, housing affordability is a growing issue in metro Phoenix, long known for its affordable housing environment.