In a move that signals its growing dominance in the manufactured and modular housing industry, Cavco Industries has announced it will acquire Houston-based American Homestar Corporation — known to many as Oak Creek Homes — for $190 million in cash. This acquisition, expected to close during Cavco’s third fiscal quarter of 2026, dramatically increases the company’s footprint in the South-Central U.S., an area experiencing strong demand for affordable, factory-built homes. With this single strategic purchase, Cavco is not just buying manufacturing capacity but expanding its brand influence and market reach in Texas, Louisiana, and Oklahoma.
Why It Matters
The significance of this acquisition lies in its scope and immediate impact. American Homestar operates two manufacturing facilities and an impressive network of 19 retail centers, which together delivered nearly 1,700 homes over the past year. During the trailing 12 months ending May 2025, the company generated $194 million in revenue, posted $16.6 million in net income, and achieved $17.8 million in adjusted EBITDA. By integrating American Homestar’s operations, Cavco instantly strengthens its position as a key provider of affordable housing in a region where population growth and housing shortages intersect.
What makes this deal even more notable is how it is financed. Cavco plans to fund the acquisition entirely from existing cash reserves, avoiding additional debt and positioning the deal to be immediately accretive to earnings. This means the financial benefits begin on day one, with anticipated gains in operational efficiency and shared resources boosting profitability. The acquisition also opens opportunities to optimize purchasing power, consolidate logistics, and coordinate distribution more effectively across brands, which could enhance margins and reduce overall costs.
Leadership Speaks: Culture Meets Strategy
Both companies have emphasized that this merger is not merely about numbers and market share — it’s about cultural fit and shared vision. Cavco CEO Bill Boor praised American Homestar’s leadership, particularly the Teeter family, for their deep-rooted commitment to quality and their resilience through challenging markets. Boor sees a clear alignment between Cavco’s operational philosophy and American Homestar’s community-focused approach, which he believes will ease the integration process and create a strong foundation for future growth.
For American Homestar, CEO Dwayne Teeter described the acquisition as a “perfect cultural fit,” noting that joining forces with Cavco provides employees with a larger platform and more robust resources while maintaining the core values that have defined the company for decades. Employees and management alike see this transition not as an ending but as an opportunity to become part of a dynamic and growing national leader in manufactured housing.
The Strategic Rationale: Digging Deeper
The South-Central U.S. has long been a hotbed for affordable housing demand, driven by steady population growth and ongoing housing shortages. By acquiring American Homestar, Cavco solidifies its hold in this vital region, gaining access to a well-established manufacturing and retail network precisely where it is needed most. This geographic leverage is expected to help Cavco respond more nimbly to local housing needs and market shifts, while strengthening relationships with regional suppliers and contractors.
Beyond geography, the acquisition enables Cavco to capitalize on economies of scale. Combining the production volumes of both companies allows for greater purchasing power, which can lower material costs and improve factory utilization. The opportunity to share best practices, streamline processes, and consolidate overhead expenses promises to further enhance operational efficiency and profitability. This strategic move exemplifies Cavco’s long-term focus on sustainable growth rather than simply chasing short-term gains.
From a financial standpoint, the valuation is equally compelling. At roughly a 10.7x multiple of adjusted EBITDA, the price falls comfortably within industry norms, representing fair value for a profitable, scaled business with strong market potential. For Cavco, this transaction offers a rare opportunity to acquire a solid and growing operation without overpaying, all while enhancing shareholder value.
Watchpoints Ahead
While the announcement has been met with enthusiasm, several important watchpoints remain. The acquisition is subject to regulatory approvals, including compliance with Hart-Scott-Rodino (HSR) antitrust filing requirements. The agreement includes a deadline of October 31, 2025, and a $6 million termination fee if the deal does not proceed as planned. This underscores the importance of careful navigation through legal and regulatory hurdles.
Integration will also be critical. Merging two large organizations, each with its own systems, cultures, and workflows, presents both operational and human challenges. Cavco has experience with acquisitions, which should help mitigate these risks, but maintaining morale, aligning leadership teams, and blending corporate cultures will be essential to realizing the anticipated benefits.
Finally, the broader market environment cannot be ignored. Manufactured housing is deeply sensitive to macroeconomic conditions such as interest rate changes, lending constraints, and shifts in consumer sentiment. While Cavco’s use of cash reserves rather than debt strengthens its resilience, potential economic headwinds could impact demand or delay the full realization of synergy savings.
Bottom Line
Cavco Industries is making a clear statement with this acquisition: it intends to lead, not just participate, in the future of manufactured and modular housing. The purchase of American Homestar is more than an expansion; it is a bold step toward cementing Cavco’s role as a powerhouse in affordable housing solutions across America’s growing regions. With the right execution and a steady hand through integration, this deal has the potential to deliver substantial value to homeowners, employees, and shareholders alike — and to shape the direction of the industry for years to come.
.
With over 9,000 published articles on modular and offsite construction, Gary Fleisher remains one of the most trusted voices in the industry.
.
CLICK HERE to read the latest edition
Contact Gary Fleisher
Hudson Valley Homes
