Although the Ryland Group is selling a majority interest in its modular-home operations, little will change initially for the division, officials said.
Created in 1982, when Ryland built a $3.5 million manufacturing plant in Cecil County, the modular-homes unit today has a second plant in Fredericksburg, Va., and employs about 180.
Its employees, who are spread among the two plants and the division's Columbia headquarters, will remain with the division despite its pending sale to a New York-investment banking firm.
The Ryland Group Inc. yesterday announced that the division will be purchased by a new entity formed by the investment firm Nagelvoort & Co. Inc. Both companies refused to disclose the amount of the transaction, which is expected to be completed next month.
But yesterday Ryland officials were underscoring the word stability in connection with the sale.
"This transition will provide our modular home builder-customers and employees with a continuity of management," said Roger Schipke, chairman of the Ryland Group. He added that the sale will allow Ryland to focus its attention "on our core businesses of building and selling homes directly to consumers and offering residential mortgage-related financial services."
Ryland officials said the transaction will be structured with cash, notes and equity in the new business, and will not have a material effect on the Ryland Group's financial position or its other operations.
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, said Nancy L. Smith, a Ryland spokeswoman.
Other senior executives and all employees of the modular homes division will become part of the new company.
In addition, the new company will lease the two Ryland plants that make modular homes.
The division's executives have an agreement with Ryland to stay at their current location until March 1992, Smith said. In the interim, the new company will choose a new location as well as a new name.
James D. Umland, a director at Nagelvoort, said plans are to have the division's headquarters remain in the Baltimore even after it leaves Ryland's Columbia office. He added that while the investment firm wants the division to remain stable, it also envisions growth.
"We could see this becoming a $100 million business within the next couple of years," Umland said.
Part of this would be achieved through Nagelvoort goal of acquiring additional modular homes manufacturing companies in the Northeast, Umland said.
Nagelvoort, a 6-year-old investment firm comprising individual investors, pension funds and endowments, wants to position itself as a dominant player in the regional modular home construction market, Umland said. The Ryland purchase helps establish a "template" that the investment firm can use to acquire similar operations.
Eventually, Umland said, Nagelvoort would like to expand its market overseas.
"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.