- Modular manufacturer and prefab construction company Katerra announced a recapitalization that will eliminate a significant amount of its debt and provide $200 million of new funding, the majority of which will come from SoftBank Vision Fund 1. Softbank's investment is in addition to $2 billion the Japanese fund previously sunk into the Katerra; it gives it a majority stake in the company and allows Katerra to avoid bankruptcy, according to The Wall Street Journal.
- In an email to employees, Katerra CEO Paal Kibsgaard said the company's rapid growth since its establishment in 2015 had been "cost-intensive" and that it "spread itself too thin." He said the firm is committed to "refocus on our core set of high-potential business lines, reduce overhead spending [and] strengthen our operational and financial systems."
- Kibsgaard also said that the restructuring and influx of cash would help Katerra with scaling the business; growing its leadership and talent; and "articulating" its approach to industrialized building production.
In response to questions about the deal, Katerra emailed this statement to Construction Dive:
"Katerra maintains a strong core business with a highly differentiated set of offerings, exiting 2020 with nearly $2 billion in global revenue, more than 200 active global projects, and over 15,000 multifamily units built and renovated in the U.S. alone.
“The recent recapitalization approved by shareholders helps to further this momentum by strengthening the company’s financial position, supporting a solid transition for the company into the recovering 2021 economy, and ensuring Katerra can continue investment in its most promising innovations, which include factory-built housing and sustainable mass timber."
The core business lines the company said it will focus on are:
- Multifamily building platforms.
- Mass timber.
- Nationwide construction services.
- Its renovations network.
- Factory-driven construction in Saudi Arabia and India.
A possible cash crunch at Katerra was revealed in December 2019 when the company announced it was shutting down its 250,000-square-foot factory in Phoenix and laying off 200 workers. At the time, former CEO Michael Marks said the company, with a backlog of $4 billion and a project pipeline of more than $15 billion, Katerra was on the “path to operating profitably in 2020."
There were also reports prior to that announcement that Katerra had backed out of several hotel and apartment projects. In addition, a planned 600,000 factory in San Marcos, Texas,was put on hold in April, according to the San Marcos Daily Record. The San Marco City Council agreed to provide property tax incentives to Katerra in exchange for building its project there, but the company said the pandemic had forced a change of plans.