Wednesday, March 2, 2011


Fleetwood Homes, a subsidiary of Cavco Industries, has agreed to buy the assets of Palm Harbor Homes, which has been in Chapter 11 bankruptcy reorganization since Nov. 29.

Phoenix-based Cavco (Nasdaq:CVCO) makes manufactured homes. Dallas-based Palm Harbor also makes factory-built housing as well as providing related financing and insurance, according to an announcement in January that Fleetwood would bid on the asset package and provide debtor-in-possession financing during the company’s reorganization.

Fleetwood, owned 50 percent by Cavco and 50 percent by New York-based Third Avenue Value Fund, created another subsidiary, also carrying the Palm Harbor name, which ended up with the successful $83.9 million bid during the bankruptcy auction March 1. The court must still give the deal its blessing.

The deal includes substantially all of Palm’s assets, including manufactured and modular housing construction operations, retail businesses, outstanding stock of its insurance and finance subsidiaries as well as assuming certain liabilities. Palm Harbor, founded in 1977, has operations in Arizona, according to its website.
Cavco's Fleetwood subsidiary, based in Riverside, Calif., also was acquired in Chapter 11 reorganization. Cavco's final bid for those assets was $21.8 million in August 2009.

For its most recent quarter ended Dec. 31, Cavco posted revenue of $39.6 million and net income of $24,000. Palm Harbor had net sales of $66.3 million for the quarter ended Sept. 24 and posted a loss of $10.9 million.

“While we have continued to address the dynamics of a difficult market, we are facing significant challenges,” said Palm Harbor CEO Larry Keener at the time those financials were filed. “The company is experiencing severe liquidity constraints and has amortization and other debt service requirements. As such, we are currently in discussions with potential lenders, as well as other strategic parties.”


Anonymous said...

Was Nationwide Homes included in this purchase?

Coach said...

As far as I know, it was. Nationwide will survive but we'll have to see in what form or if they will be sold. For their sake, I hope they find a home where they can continue to be a leader in good, solid modular single family homes.

Time will tell.

Ray in NC said...

To all my friends at Nationwide Homes. The king is dead, long live the king. The king of mobile homes, that is. If you are part of the buyout of palm harbor, you better get ready to bend over and be turned into a trailer factory.

Anonymous said...


I do not see the day when Nationwide (Martinsville, VA plant specifically) will do mobile homes. There remains value in the Nationwide name and under good management, with proper funding, it can again be a player in the residential modular industry. I would have liked to see someone like Haven buy this brand instead of wasting money on the Penn Lyon factory. Even its VA location makes more sense plus they can still serve SC where they have dropped lots and lots of dollars over the past upteen years.

Anonymous said...

A builder friend of mine was in their plant last week and he called me and told me that there was only two homes in the plant and the rest of the plant was full of small trailers.If it looks like a trailer and has a steel carrier built in then it must be a tralier.