[Champion Letterhead]
FOR IMMEDIATE RELEASE
Investor Contacts: Press Contact:
Jacqueline Dout Elizabeth Higashi Jeff Caponigro
Exec. Vice President & CFO Investor Relations Media Relations
(810) 340-9090 (847) 304-1655 (810) 355-3200
CHAMPION ENTERPRISES, INC. ANNOUNCES
SIGNING OF DEFINITIVE MERGER AGREEMENT
WITH REDMAN INDUSTRIES, INC.
Auburn Hills, MI, August 20, 1996 -- Walter R. Young,
Jr., chairman, president and chief executive officer of
Champion Enterprises, Inc. (NYSE: CHB) announced today
the signing of a definitive agreement to merge Redman
Industries, Inc. (NASDAQ: RDMN) with Champion, pending
among other things, compliance with applicable regulatory
requirements and the approval of the shareholders of both
companies.
The board of directors of both companies unanimously
approved the transaction. The agreement calls for the
exchange of 1.24 shares of Champion Enterprises common
stock for each outstanding share of Redman common stock.
Champion will issue approximately 17 million shares of
common stock to provide for the exchange to holders of
Redman common stock. After the merger, Champion
Enterprises is expected to have approximately 51 million
shares outstanding. The combination is intended to
qualify as a tax-free reorganization to the shareholders
of Redman.
The merger will be accounted for as a pooling of
interests and is expected to close within approximately
four months. Champion also announced that it has
rescinded its $10 million stock repurchase program, of
which approximately $4.2 million had been completed. The
agreement also calls for the election of two Redman
directors to Champion's board of directors.
Walter R. Young, Jr. will remain chairman, president
and chief executive officer of Champion Enterprises, with
the overall company's corporate offices remaining in
Auburn Hills, Michigan. Redman Industries will become a
subsidiary of Champion, and its headquarters will remain
in Dallas, Texas, headed by Robert M. Linton, president
and chief executive officer of Redman.
"The opportunity provided by the combination of our
two organizations makes the merger economic for
shareholders of both companies," said Young. "Our
similar decentralized operating approach allows us to
respond quickly to changes in our marketplace. Redman's
manufacturing facilities enhance our geographic coverage
in traditional growth areas such as Florida, Arizona,
Texas, North Carolina and southern California, and expand
our share of the Midwest and central states. Together,
the two organizations cover all of the Untied States and
western Canada."
"Both companies are proven operators, producing
quality products with high levels of profitability and
productivity. Redman and Champion have the highest
return on equity in the industry. Together, we can
create an even more outstanding organization," Redman's
Linton stated.
"We both have large independent retail dealer
organizations, with over 2,000 Champion dealer locations
and 1,400 Redman dealer locations. Both organizations
produce high-end manufactured homes, with the multi-
section mix averaging 54-57 percent," Linton added.
Young described the strengths of the merger further,
"While each company is strong individually, together we
have tremendous growth and profit opportunities. We can
offer dealers a broader array of products and can develop
models for new markets, including suburban and urban
sites. We already have one of the industry's best
production processes and most economic internal expansion
programs. And together, we shall provide the
manufactured housing industry leadership in quality and
service.
"The proforma trailing twelve month sales for the
two companies are approximately $1.5 billion. We will
have a clean balance sheet, and strong cash flows for
future expansions or acquisitions. In addition, we will
have a market capitalization of more than $1 billion and
enjoy increased liquidity, which should attract new
shareholders. Excluding initial transaction costs, on a
proforma basis for the last twelve months ended June 29,
1996, Redman's operations are accretive and will
contribute to our long term goal of a minimum of 20
percent compound annual growth in earnings per share,"
Young explained.
"We will all benefit form the breadth of management
experience within both companies," added Linton. "I am
looking forward to working with the Champion senior
management team as we continue to grow our combined
organization into one of the strongest in the industry,"
he added.
"Overall, I can't think of a more logical or better
combination than Redman and Champion. We believe that
our combined focus on quality, service and productivity
will serve our customers and shareholders well,"
concluded Young.
Redman Industries, Inc., based in Dallas, Texas, is
the third largest producer of manufactured homes in the
United States, operating 18 manufacturing facilities and
selling homes through over 1,400 independent retailers in
40 states. Sales for the year ended March 29, 1996 were
$614 million, with net income of $24 million, or $1.69
per share. The return on equity for that period was 41
percent. The company produced 24,557 homes, of which 53
percent were multi-section. There are 4,000 employees
nationwide.
Champion Enterprises, Inc., headquartered in Auburn
Hills, Michigan, is one of the fastest growing companies
in the manufactured housing industry and is number two in
U.S. market share. The company operates 31 manufactured
housing facilities and is represented by over 2,000
independent retail dealers. Champion also produces
commercial buses through its subsidiary Champion Motor
Coach, Inc. For the year ended December 30, 1995, sales
were $798 million and net income $32 million with
earnings per share of $1.01. Champion was cited by
Forbes magazine as the highest five-year average return
on equity in the construction industry. Last year its
return on equity was 34 percent. Champion produced
29,398 homes in 1995, of which 56 percent were multi-
section. The company has nearly 6,000 employees in the
U.S. and western Canada.
*****
A JOINT CONFERENCE CALL INCLUDING THE SENIOR MANAGEMENT
OF CHAMPION ENTERPRISES AND REDMAN INDUSTRIES WILL BE
HELD ON TUESDAY, AUGUST 20, 1996 AT 11 A.M. EDT. YOU MAY
PARTICIPATE BY CALLING (312) 864-5011 AND REQUESTING THE
CHAMPION/REDMAN CONFERENCE CALL. IF YOU WOULD LIKE TO
HEAR A REPLAY OF THE CONFERENCE CALL, IT WILL BE
AVAILABLE AN HOUR AFTER THE CALL IS COMPLETED, AND UNTIL
SUNDAY, AUGUST 25, 1996 ON A 24-HOUR BASIS BY CALLING
(402) 220-6017.
FACT SHEET
(UNAUDITED)
LAST TWELVE MONTHS ENDED JUNE 29, 1996
Champion Redman Industries,
Enterprises, Inc.* Inc.
Stock Symbol NYSE: CHB NASDAQ:RDMN
Financial Data
Net Sales $871 million $628 million
Net Income $37 million $25 million
EPS $1.14 $1.81
Book Value/Share $4.01 $5.14
Return on Equity 33% 39%
Current Weighted 33.5 million 13.6 million
Average Shares
Outstanding
Current Share Price $21 5/8 $25 3/4
Operating Data
Principal markets Midwest & Central West & Southeast
Market coverage 90% of U.S. and 40 states
Western Canada
Units produced 31,967 24,881
% Multi-section 57% 54%
Current number of 31 18
housing plants
Retail dealer locations 2,000 1,400
Employees 6,000 4,000
Headquarters Auburn Hills, Mich. Dallas, TX
_____________________
* Financial data includes Champion Motor Coach, Inc. net sales
of $58 million, approximately 7% of total sales.