Southern Energy Homes to acquire Cavalier Homes

Cavalier Homes has announced that its board of directors has entered into a definitive merger agreement for the company to be acquired by Addison, Ala.-based Southern Energy Homes, a wholly owned subsidiary of Clayton Homes.

Terms of the agreement call for the payment of $2.75 cash for each outstanding share of common stock.

"The agreed share price represents a 23% premium over Friday's closing stock price in an all-cash offer to acquire Cavalier Homes," said Bobby Tesney, Cavalier Homes' CEO. "Given the current economic conditions and the tough operating environment of the manufactured housing industry, the proposed merger with Southern Energy Homes represents a tremendous opportunity to maximize shareholder value.”

The company expects to complete the transaction in the third quarter of 2009. Upon completion of the transaction, Cavalier Homes will become a wholly owned subsidiary of Southern Energy Homes.

Avondale Partners acted as exclusive financial advisor to Cavalier Homes.