The Columbia-based Ryland Group announced yesterday that it plans to sell the majority interest in its modular home operations, Ryland Building Systems, to a new company formed by Nagelvoort & Co., a New York-based investment banking firm. The operations now employ 180 people.
"They approached us. We didn't have this business up for sale," said Nancy L. Smith, a Ryland vice president. She declined to disclose terms of the deal, which she said is expected to close on June 30.
As the deal is structured, two top officials currently heading Ryland's modular operations will go with the new company and acquire a minority stake in the firm, Ms. Smith said. In addition, the Ryland Group itself will retain a small stake and will continue to own its two modular building plants, one in North East and the other in Fredericksburg, Va. Ryland will lease the plants to the newly formed company.
The new company will be called Regional Business Systems and will be operated very much as it currently is, according to James Umland, a director of Nagelvoort.
Ryland has faced financial difficulties in recent months. During the first quarter, which ended March 30, the company lost $4.4 million compared with earnings of $6.5 million for the same quarter in 1990.
But Ms. Smith said the decision to sell the modular home operationswas unrelated to the company's financial problems. Rather, she said, it was tied to the company's determination to concentrate on its two core businesses -- its homebuilding operation and its mortgage services company.
"This sale is not going to have a material effect on the financial position or results of the company," said Ms. Smith.
Ryland has been involved in the modular housing field since 1982. Through this building technique, large modular units are constructed in a factory and then transported by truck to the building site.