The Ryland Group Inc. today announced that it is selling a majority interest in its modular-home operations and certain of its assets to a New York investment banking firm.
The purchaser will be a new entity formed by the investment firm, Nagelvoort & Co. Inc., which approached Ryland, said Nancy L. Smith, a spokeswoman for Ryland.
The companies refused to disclose the amount of the transaction, which is expected to be completed next month.
James D. Umland, a director at Nagelvoort, said that the company's strategy is to gain a presence in the modular-home market in the Northeast following the purchase of a Northwest manufacturer. NCO Investors Ltd., a partner of Nagelvoort, recently bought Guerdon Industries of Portland, Ore., a maker of modular and mobile homes.
Umland said that Nagelvoort directors hope the Ryland purchase will establish a "template" that will help the investment firm become a dominant player in modular homes in the Northeast by acquiring similar operations in the region.
Eventually, Umland said, Nagelvoort would like to expand its market overseas, particularly in Eastern bloc countries.
"We were attracted to Ryland as a modular company because it seems to have good momentum in the inner city, and has really established itself as a builders' builder," Umland said.
Ryland was the sixth largest manufacturer of modular homes in the nation in 1989, the most recent year for which figures are available, he said.
Under the tentative agreement, Ed Craig, manager of Ryland Modular Homes, and Keith Sholos, vice president, will own a minority interest in the new company. Also, the Ryland Group will retain a minority interest, Smith said.
Other senior executives and 180 employees of the modular homes division will become part of the new company. In addition, the new company will lease two Ryland plants that make modular homes -- one in Cecil county and the other in Fredericksburg, Va.