SOURCE: Champion Enterprises

September 11, 2006 08:45 ET

Champion Enterprises Announces the Divestiture of Its Remaining Retail Operations

$52 Million Sale of California-Based Advantage Homes Completes Champion's Exit of Retail Operations

AUBURN HILLS, MI -- (MARKET WIRE) -- September 11, 2006 -- Champion Enterprises, Inc. (NYSE: CHB), a leader in factory-built construction, announced today that it has entered into an agreement to sell its Advantage Homes retail operations to an affiliate of Encore Partners, LLC, a private investment group, for total cash consideration of approximately $44 million and a subordinated 5-year interest bearing note of approximately $8 million. As part of the divestiture, Champion has entered into a 5-year supply agreement with the buyers whereby its manufacturing operations in California and Arizona will continue to be the primary supplier of factory-built homes to Advantage.

"This sale accomplishes several very important objectives for Champion," said William Griffiths, Chairman, President and CEO of Champion. "It completes our exit from the retail business on favorable financial terms, providing an influx of cash which we intend to put to work in the manufacturing arena. In addition, it places Advantage Homes, an important customer for our manufacturing operations, in the hands of a long-term business partner well suited to continue to grow and enhance the Advantage operation."

"The zealous commitment of the Advantage staff, management and vendors to exceeding the expectations of California new home buyers has built the dominant force in their markets," said Jim Nichols, Managing Member of Encore. "We view any potential slowing in the residential real estate market as an opportunity for the Advantage affordable housing business model. Advantage's focus on the retirement market is particularly well aligned with the demographics of the markets it serves. With the long-term commitment of product from Champion and the sizeable cost advantage of factory-built housing, Advantage is uniquely positioned to meet the future needs of home buyers."

The transaction is expected to be completed in the next thirty days, subject only to customary closing conditions. Upon closing, the Company expects to record pre-tax income of approximately $12 million.

About Champion

Champion Enterprises, headquartered in Auburn Hills, Mich., a leader in factory-built construction, has produced more than 1.6 million homes through its family of homebuilders since 1953. Today, Champion operates 36 manufacturing facilities in North America and the United Kingdom and partners with over 3,000 independent retailers, builders and developers. For more information, please visit

About Encore

Encore Partners, LLC is a private investment group whose principals include factory-built housing industry veterans. Champion enjoys a continuous relationship as a home supplier for over 30 years with the Principals of Encore. The Principals additional investments include factory-built housing sales centers and communities, as well as residential and commercial real estate development.

Forward-Looking Statements

This news release contains certain statements, including statements regarding the divestiture of Advantage, sales, cash and uses of cash, pre-tax income, and the financial position of both Champion and Advantage, which could be construed to be forward-looking statements within the meaning of the Securities and Exchange Act of 1934.

These statements reflect the Company's views with respect to future plans, events and financial performance. The Company does not undertake any obligation to update the information contained herein, which speaks only as of the date of this press release. The Company has identified certain risk factors which could cause actual results and plans to differ substantially from those included in the forward-looking statements. These factors are discussed in the Company's most recently filed Form 10-K and other SEC filings, in each case under the section entitled "Forward-Looking Statements," and those discussions regarding risk factors are incorporated herein by reference.

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