Cavco expects to buy Palm Harbor

Cavco Industries Inc., a Phoenix-based maker of manufactured homes, said it expected to get approval today from a Delaware Bankruptcy Court judge to purchase competitor Palm Harbor Homes Inc. of Dallas.

Cavco on Tuesday won a court auction against four other bidders to buy Palm Harbor, which filed for bankruptcy reorganization in November, for $83.9 million, said Joseph Stegmayer, Cavco's chairman, president and CEO.

The purchase would help Cavco diversify by gaining market share in Florida; expanding into some lines it does not have now, such as military housing; gaining mortgage and insurance companies; expanding its distribution to 35 states from 10; and increasing its number of U.S. operating plants to 17 from 10. It also would acquire another six Palm Harbor plants that have been idled.

Cavco's employees would grow to about 2,200 from 1,200.

In August 2009, Cavco bought another large competitor, Fleetwood Enterprises Inc. of Riverside, Calif., also out of a Bankruptcy Court, for $26.6 million.