Orange Blossoms for Two Corporations
Marriages, they say, are made in heaven. Corporate mergers are a sort of marriage but the record is unclear as to where they are fabricated; some, however, are obviously more felicitous than others.
As with human marriages, the more felicitous are those where the strengths and weaknesses of the partners dovetail so that they complement each other, each strong where the other is weak. On that basis, one of the more felicitous corporate marriages is just about to be consummated.
It is between a housing manufacturer looking for a place to put its homes and a land developer specializing in mobile home parks and looking for homes to put in them. To be specific, Silvercrest Homes, the manufacturer, and Santiago Corp., the developer. The nuptials are expected in December.
One immediate result of the merger, according to G. F. Edmundson, Silvercrest president, will be that Silvercrest will design a new product line specifically for the parks developed by Santiago, which will become a wholly owned subsidiary of Silvercrest.
Silvercrest, headquartered in Corona, was founded in 1969 by Howard Sherman, now chairman of the board, and the late Herman Kaye. Listed on the American Stock Exchange, it has long been one of the nation’s leading mobile home manufacturers and in recent years, along with most other companies in that field, has added homes designed specifically for private-lot placement.
Santiago, based in Santa Ana, was founded in 1976 and, according to Richard Simonian, president and principal stockholder, has built 70 mobile home parks.
The merger is taking place through an exchange of stock. Santiago’s 14 shareholders have agreed that the company has a net worth of not less than $5 million, Simonian said, and will receive $5-million worth of Silvercrest stock at about $4.20 a share.
Simonian has been a director of Silvercrest for about a year and also has been a shareholder in that company since before the merger; he will continue as chief operating officer of Santiago.
Gary King, senior vice president and chief operating officer of Silvercrest, will move his office to Santiago’s headquarters where there are large accounting and computer systems, preparatory to merging the two departments.
The mobile/manufactured home industry has been having troubles. Production in California was about 25,000 a year not too many years ago; currently it is at best about 10,000 a year, some say as little as 8,000.
A good part of the problem is the lack of mobile home sites, principally rental parks in convenient, basically close-in, areas. There are next to no available spaces in Los Angeles and Orange counties and mobile home park construction has dwindled to nearly nothing in the past few years.
In a project that was under way before the merger was announced, Santiago is building a major mobile home park in the San Fernando Valley that, along with other projects of the company, “will result in an additional $32 million in sales for Silvercrest,” Simonian said.
Edmundson commented, “With the merger of Santiago Corp., Silvercrest will be assured of its fair share of the California market. The joining of forces of our two companies will allow us to become on of the largest manufactured home firms in the United States.”
And Simonian agreed: “In California today, in order to be successful, the developer and the manufacturer need to combine their talents, resources and efforts.”
Talk of marriages leads to talk of adoptions. The California Solar Energy Industries Assn. wants to “adopt” orphaned solar energy systems.
The Greater Los Angeles chapter of Cal-SEIA has instituted a consumer “helpline” to help solve the problem of solar heating systems that were installed by contractors who have gone out of business or who cannot be located by the system’s owner.
“It’s no secret that during the Public Utilities Commission rebate programs a lot of companies and individuals got into the solar business who had neither the expertise nor the commitment required,” according to Bob Ellis, a helpline founder and owner of Environmental Solar Design Inc., North Hollywood.
“Unfortunately, a lot of apartment owners got lured into purchasing systems from these people,” he said. “Owners are now paying the price for their initial ‘bargain’.”
Ellis explained that the program will be staffed by established solar companies who must meet rigorous qualifications and be members of Cal-SEIA in good standing.
The helpline number is 818/763-7472. By calling it, the solar system owner will be able to get one hour of free analysis by a solar professional, who will give the owner a detailed, written list of the repairs or improvements needed, or perhaps make minor adjustments on the spot.