ELKHART, Ind. and TROY, Mich., Jan. 5,
2018 /PRNewswire/ -- Skyline Corporation ("Skyline")
(AMEX: SKY) and Champion Enterprises Holdings, LLC ("Champion"),
the parent company of Champion Home Builders, Inc., today 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, Inc. 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
Corporation and trade on the NYSE American under the ticker symbol
"SKY." The Board of Directors will comprise eleven 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 Corporation. Additionally, Laurie
Hough, Champion Chief Financial Officer, will serve as Chief
Financial Officer of the combined company. Skyline anticipates
nominating John Firth, current
Chairman of the Board of Skyline, and Rich
Florea, current Chief Executive Officer of Skyline, as
Directors of the combined company and Art
Decio, an original founder of Skyline and member of the
Board of Directors since 1959, as a senior advisor to the combined
company's Board of Directors. Skyline Champion Corporation's
principal offices will remain in Elkhart,
Indiana with additional executive offices in Troy, Michigan.
The business combination will create the nation's largest
publicly traded factory-built housing company, with greater than
$1 billion in pro forma revenue over
the past twelve months.* The combined company will have an
expansive operational footprint throughout North America, with 36 manufacturing
facilities, 24 of which are in the top 20 states for manufactured
housing shipments. Skyline Champion Corporation 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.
It is anticipated that the transaction will generate significant
annual synergies to be achieved through direct cost savings,
reduced overhead costs and operational improvement opportunities.
Additional synergies also are expected through cross-selling and
distribution optimization by leveraging the combined company's
owned and independent dealer network.
Rich Florea, Chief Executive
Officer of Skyline said, "The combination of Skyline and Champion
represents a unique opportunity for two well-respected companies
with strong brand history to come together and continue providing
high-quality homes for customers, while also providing the greatest
long-term value for shareholders. The combined company will have a
strong presence throughout North
America and will operate at a significant scale in addition
to offering a broader choice of homes to customers. We believe
Skyline Champion Corporation will be well positioned for impressive
growth in the coming years, to the benefit of employees,
shareholders and customers."
Keith Anderson, Chief Executive
Officer of Champion commented, "Getting to know the Skyline team
has reaffirmed our belief that the two companies are a great fit
for a combination. Both companies share a deep commitment to
providing quality products and outstanding customer service. We
will remain focused on executing our strategy as an even stronger
company. I am particularly pleased that Art
Decio has agreed to serve as a senior advisor to the Board.
Art is a legendary figure in manufactured housing and we are
fortunate to have the benefit of his lifelong commitment to quality
and integrity in our industry."
Art Decio, Skyline's largest
shareholder, has agreed to vote in favor of and fully support the
transaction.
Art commented, "Champion and Skyline are tremendous brands in
our industry, both dating back to the 1950s. Walter and Henry,
Champion's founders, built a tremendous company that will be a
great partner with Skyline. Both Skyline and Champion share similar
corporate cultures and have earned a reputation for uncompromising
integrity across their relationships with communities, retailers,
suppliers and customers. Skyline Champion Corporation will be well
positioned to continue to grow and serve its customers with the
best products the industry has to offer."
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.
Jefferies LLC served as financial advisor to Skyline and Barnes
& Thornburg LLP acted as Skyline's legal counsel. Ice Miller
LLP acted as legal counsel to Skyline's Special Committee of the
Board. RBC Capital Markets, LLC served as financial advisor to
Champion and Ropes & Gray LLP acted as Champion's legal
counsel.
In connection with the transaction, Skyline and Champion have
received a joint commitment from RBC Capital Markets, LLC and
Jefferies LLC, contingent upon the closing of the transaction, to
consolidate and upsize existing revolving credit facilities for use
by the combined company.
About Skyline Corporation:
Skyline Corporation and its consolidated subsidiaries design,
produce, and market manufactured housing, modular housing, and park
models to independent dealers, developers, campgrounds, and
manufactured housing communities located throughout the United States and Canada. The company has eight manufacturing
facilities in seven states. Skyline Corporation was originally
incorporated in Indiana in 1959,
as successor to a business founded in 1951, and is one of the
largest producers of manufactured and modular housing in
the United States. For more
information, visit http://www.skylinecorp.com.
About Champion Enterprises Holdings,
LLC:
Champion Enterprises Holdings, LLC was formed in 2010 as the
parent company of Champion Home Builders, Inc. which was founded in
1953. Champion Home Builders specializes in a wide variety of
manufactured and modular homes, park-model RVs and modular
buildings for the multi-family, hospitality, senior and workforce
housing sectors. The company operates 28 manufacturing facilities
throughout North America.
Additionally, Champion operates a factory-direct retail business,
Titan Factory Direct, with 21 retail locations spanning the
southern U.S., and Star Fleet Trucking, providing transportation
services to the manufactured housing industry from 10 dispatch
locations across the United
States. Champion is majority owned by funds affiliated with
Bain Capital Credit (https://www.baincapitalcredit.com),
Centerbridge Partners, L.P. (https://www.centerbridge.com), and MAK
Capital. For more information, visit
https://www.championhomes.com.
Forward-Looking Statements
Statements in this press release regarding the proposed
transaction between Skyline and Champion, the expected timetable
for completing the proposed transaction, the completion of the
consolidation and upsize of the revolving credit facilities and the
potential benefits created by the proposed transaction are intended
to be covered by the safe harbor for "forward-looking statements"
provided by the Private Securities Litigation Reform Act of 1995.
These forward-looking statements generally can be identified by use
of statements that include, but are not limited to, phrases such as
"believe," "expect," "future," "anticipate," "intend," "plan,"
"foresee," "may," "should," "will," "estimates," "potential,"
"continue," or other similar words or phrases. Similarly,
statements that describe objectives, plans, or goals also are
forward-looking statements. Such forward-looking statements involve
inherent risks and uncertainties, many of which are difficult to
predict and are generally beyond the control of Skyline, Champion
or Skyline Champion Corporation. Skyline cautions readers that a
number of important factors could cause actual results to differ
materially from those expressed in, implied, or projected by such
forward-looking statements. Risks and uncertainties include, but
are not limited to: the failure of the proposed transaction, or
consolidation and upsize of the revolving credit facilities, to
close, Skyline Champion Corporation's inability to realize the
expected benefits from the proposed transaction, general economic
conditions; availability of wholesale and retail financing; the
health of the U.S. housing market as a whole; federal, state, and
local regulations pertaining to the manufactured housing industry;
the cyclical nature of the manufactured housing industry; general
or seasonal weather conditions affecting sales; potential impact of
natural disasters on sales and raw material costs; potential
periodic inventory adjustments by independent retailers; interest
rate levels; the impact of inflation; the impact of high or rising
fuel costs; the cost of labor and raw materials; competitive
pressures on pricing and promotional costs; Skyline's relationships
with its shareholders, customers, and other stakeholders;
catastrophic events impacting insurance costs; the availability of
insurance coverage for various risks to Skyline; market
demographics; and management's ability to attract and retain
executive officers and key personnel and other risks and
uncertainties more fully described in Skyline's Annual Report on
Form 10-K for the year ended May 31,
2017, as filed with the SEC, as well as the other filings
that Skyline makes with the SEC. Investors and stockholders are
also urged to read the risk factors set forth in the proxy
statement carefully when they are available.
If any of these risks or uncertainties materializes or if any of
the assumptions underlying such forward-looking statements proves
to be incorrect, the developments and future events concerning
Skyline, Champion and Skyline Champion Corporation set forth in
this press release may differ materially from those expressed or
implied by these forward-looking statements. You are cautioned not
to place undue reliance on these statements, which speak only as of
the date of this document. We anticipate that subsequent events and
developments will cause our expectations and beliefs to change.
Skyline assumes no obligation to update such forward-looking
statements to reflect events or circumstances after the date of
this document or to reflect the occurrence of unanticipated events,
unless obligated to do so under the federal securities laws.
Additional Information for Shareholders
In connection with the matters to be approved by Skyline's
shareholders pursuant to the proposed exchange transaction
described in this document, Skyline will prepare a proxy statement
to be filed with the SEC. When completed, a definitive proxy
statement and a form of proxy will be mailed to the shareholders of
Skyline. Skyline's shareholders are urged to read the
proxy statement regarding the proposed exchange transaction because
it will contain important information about the matters to be
approved by Skyline's shareholders in connection with the proposed
exchange and important information about the proposed exchange
transaction itself. Skyline's shareholders will be able
to obtain, without charge, a copy of the proxy statement (when
available) and other relevant documents filed with the SEC from the
SEC's website at www.sec.gov. Skyline's shareholders also
will be able to obtain, without charge, a copy of the proxy
statement and other relevant documents (when available) by
directing a request by mail or telephone to Skyline Corporation,
2520 By-Pass Road, P.O. Box 743, Elkhart,
Indiana 46514, Attention: Corporate Secretary, or by calling
(574) 294-6521, or from Skyline's website at www.skylinecorp.com
under the tab "Investors – SEC Filings." The information
available through Skyline's website is not and shall not be deemed
part of this document or incorporated by reference into other
filings Skyline makes with the SEC. This communication does
not constitute an offer to sell or the solicitation of an offer to
buy any securities.
Skyline, Champion and their respective directors and certain of
their officers may be deemed to be participants in the solicitation
of proxies from Skyline's shareholders with respect to the special
meeting of shareholders that will be held to consider the matters
to be approved by Skyline's shareholders in connection with the
exchange transaction. Information about Skyline's directors
and executive officers and their ownership of Skyline's common
stock is set forth in the proxy statement for Skyline's 2017 annual
meeting of shareholders, as filed with the SEC on Schedule 14A on
August 22, 2017. Shareholders
may obtain additional information regarding the interests of
Skyline and its directors and executive officers, and proposed
Skyline Champion Corporation and its anticipated directors and
executive officers, in the proposed Exchange, which may be
different than those of Skyline's shareholders generally, by
reading the proxy statement and other relevant documents regarding
the proposed Exchange, when filed with the
SEC.
* Champion LTM as of 9/30/17 and
Skyline LTM as of 8/31/17
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SOURCE Skyline Corporation