Berkshire Hathaway to Buy Home Builder

Omaha, NE, April 2—Berkshire Hathaway has agreed to buy modular home builder Clayton Homes Inc. for $1.7 billion in cash. The $12.50 a share offer is a 12% premium on Clayton Homes' share price at the close of market Tuesday. There are about 136.1 million shares outstanding. According to a joint statement from the firms, Clayton Homes will continue to be based in Knoxville, Tennessee, and its management group and 6,800 employees will remain in place. The deal is subject to Clayton shareholder approval. Chairman James L. Clayton and the Clayton Family Foundation, who together own 28% of Clayton stock, will vote in favor of the takeover. For the fiscal year ended June 30, Clayton Homes had net income of $124.1 million on revenues of $1.2 billion. Berkshire Hathaway chairman Warren Buffett said, "Clayton Homes is far and away the premier company in the manufactured housing industry with high quality products and outstanding leadership and personnel. By retaining discipline, Clayton Homes is the lone tower of strength in an industry battered in recent years by the consequences of lax financing practices."

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