.

Tuesday, February 15, 2011

CAVCO/FLEETWOOD - PALM HARBOR DEAL UNSETTLED

Palm Harbor Homes, the manufactured housing giant headquartered in the southwest filed for bankruptcy last December.  The rumor mill had it that they were going to be acquired by Cavco Homes using Fleetwood Homes as their stalking horse.  Cavco/Fleetwood was ready to inject over $50,000,000 into Palm Harbor to keep it running.

Typical Palm Harbor Single Wide

Now news is spreading that Champion Homes and Clayton Homes are both very interested in Palm Harbor.  Will there be a bidding war?  Probably.  What will happen to Palm Harbor's major modular home producing entity, Nationwide Homes, one of the biggest and best on the East coast.?

Looking at who wants Palm Harbor might give you some clues.  All three, Cavco, Champion and Clayton, the three biggest producers of single and double wide mobile homes in the US do not have strong modular home divisions.  Their mods are simply a necessary evil that they must have in their portfolio and acquiring Nationwide Homes would mean that they must step up and help run a top of the line modular company.  This probably will not be the case. 

Here are a couple of scenarios that might happen.  The winning bidder for Palm Harbor would sell Nationwide to a group of modular investors such as H.I.G. or a new home builder like New World Homes.  They could also finance the sale of the company to the current management.  Or Heaven forbid, they could close it or convert it to double wide production which would be the biggest crime hoisted on the modular housing industry in decades.

Nationwide Homes is known for primarily building affordable and upscale custom modular homes but in recent years has expanded into net-zero, vacation, in-fill and stand alone in-law and rehab modulars.  Let's hope Nationwide Homes continues to be a great modular company and not just an also ran selling doublewides.

5 comments:

Anonymous said...

I think that Nationwide will be sold to somebody not in the HUD business and with new owners it will become the best in the east.

Anonymous said...

Dear Coach,

Why do yo call New World Home builders? They are architects selling an idea and concept. They do not build their own homes.

Coach said...

I view New World as a retail builder. I also believe that their formula for marketing and selling homes is a good one.

They don't own any factory but they will probably contribute to the success of some.

Anonymous said...

It needs to be sold to new owners period. It has gone from a privately owned company to a mobile home manufacturer and consequently, they are now in Chapter 11.

J R Egerton said...

Hopefully Caveco/Fleetwood will run a more customer oriented and ethical business than Palm Harbor. I reget ever having walked into a Palm Harbor showroom...