$110 Million Deal Boosts Champion's Presence in International
and Commercial Modular Market
Steel-framed Construction Capability a Significant Product Enhancement
AUBURN HILLS, Mich., Feb. 27 /PRNewswire-FirstCall/ -- Champion
Enterprises, Inc. (NYSE: CHB), a leader in factory-built construction,
announced today that it has entered into an agreement to acquire United
Kingdom-based Calsafe Group (Holdings) Ltd. and its operating subsidiary
Caledonian Building Systems, a leading steel-framed modular manufacturer, for
approximately $110 million. The transaction will be financed through a
combination of cash and debt, via an approximate $80 million Sterling-
denominated increase in Champion's credit facility. A portion of the purchase
price will be earned upon the achievement of certain financial benchmarks over
the next four years. The transaction is expected to close early in Champion's
second fiscal quarter, and will be accretive to earnings in 2006.
Caledonian constructs steel-framed modular buildings for use as prisons,
multi-story residences and hotels, as well as military accommodations for the
UK Ministry of Defence. The company, which operates three manufacturing
facilities on a single site in Newark, UK, recorded revenues of approximately
$150 million over the last twelve months. Caledonian's steel-framed modular
technology allows for multi-story construction, a key advantage over
Champion's core North American wood-framed construction techniques.
"Caledonian is a perfect complement to our North American business," said
William Griffiths, president and CEO of Champion Enterprises, Inc. "This
transaction not only opens important international distribution channels but
it also provides us with steel-framed technology that could open up new
markets in the US. The multi-story capability will also help expand our
multi-family product offerings. As we have often said, our strategy is to
grow Champion's modular business both organically and through targeted
acquisitions. We are as excited about the modular growth opportunities in the
UK as we are those in North America."
Griffiths continued, "We are looking forward to working with Caledonian's
visionary and very capable management team which has developed a modular
process that allows for rapid construction with a very high degree of
customization. The company has grown at an average annual rate of over 35%
per year for the last three years, becoming a UK leader in the construction of
modular buildings for prisons and the military. Most recently, they have made
inroads into the hotel, education and residential markets -- all of which
promise to provide us with growth opportunities for years to come."
Caledonian's managing director, Dave Turnbull, added, "This transaction
represents a great opportunity for both companies to exchange ideas,
manufacturing techniques and other resources to our mutual benefit. There are
significant advantages to the modular production of steel-framed buildings.
With our extensive experience designing and building these structures for
customers like the Ministry of Defence and Her Majesty's Prison
Service, as well as several hotel operators and residential developers, we
believe there could be a substantial North American market for this
technology. In addition, Champion's support will give us the ability to
further develop our markets in the UK and the rest of Europe."
The increase in Champion's credit facility has been underwritten by Credit
Suisse.
More Information
A presentation containing additional information on the Caledonian
acquisition will be available later today in the Investor Relations section of
Champion's website at http://www.championhomes.com .
About Champion
Champion Enterprises, headquartered in Auburn Hills, Mich., a leader in
factory-built construction, has produced more than 1.6 million homes through
its family of homebuilders since 1953. Today, Champion operates 32
manufacturing facilities in North America and partners with over 3,000
independent retailers, builders and developers. For more information, please
visit http://www.championhomes.com .
About Caledonian
Caledonian Building Systems, headquartered in the United Kingdom, is a
leading offsite construction company specializing in the commercial and
residential applications of steel modular building systems. Since 1996,
Caledonian has designed and built both single and multi-story structures for
customers as diverse as Her Majesty's Prison Service, the Ministry of Defence,
residential developers and several hotel operators. Please visit
http://www.cbuildings.co.uk for additional information.
SOURCE Champion Enterprises, Inc.
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Related links:
http://www.championhomes.net
http://www.cbuildings.co.uk
Company News On-Call:
http://www.prnewswire.com/comp/110861.html
CONTACT:
Investor Contact: Lisa D. Lettieri, Vice
President of Investor Relations of Champion Enterprises,
+1-248-340-7731, llettieri@championhomes.net ; or Media Contacts:
Tim Hanson or Paul Kesman of Identity Investor Relations,
+1-248-258-2333, chb@identitypr.com , for Champion Enterprises,
Inc.
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