Mercer International Inc., a global forest products company based in Vancouver, BC, reported it received approval from the applicable Bankruptcy Court for the purchase by its subsidiary, Blue Varsity, of the cross-laminated timber manufacturing facility in Spokane, Wash. formerly owned by Katerra for $50 million through a bidding process.
Katerra, a mass timber and modular turnkey construction business founded in 2015, filed Chapter 11 bankruptcy in early June. The $150 million CLT plant, which was commissioned in May 2019, was subsequently shut down.
The facility is located on 54 acres and is equipped with extensive automation technologies including one of the largest CLT presses in the world. The plant has capacity of approximately 13MMSF of 5-ply panels annually or 140,000 m3 of annual production.
David Gandossi, CEO of Mercer, states, “We are very pleased with our impending acquisition of the facility. It represents an attractive entry point for us into the CLT business with a near new state-of-the-art facility. It fits well with our strategy to expand in the solid wood products space and aligns with a core value to provide sustainable and carbon reducing alternatives for a warming planet.”
Mercer International has operations in Germany and Canada and reports a consolidated annual production capacity of 2.2 million tonnes of pulp and 550MMBF of lumber.
Another new facility formerly owned by Katerra, a component manufacturing plant in Tracy, Calif., was acquired through a bidding process by Philadelphia-based Volumetric Building Companies (VAC). The company defines itself as a “volumetric modular business that simplifies complex issues by integrating architecture, logistics, manufacturing, and construction into a single package to produce multifamily housing solutions in less time at a greater return.”
Katerra went through $3 billion in equity investments since its founding. In the bankruptcy filing Katerra estimated liabilities of $1 billion to $10 billion
Katerra wasn’t shy about wanting to shake up—and speed up—the conventional construction industry. In addition to building manufacturing plants, it bought everything from architectural firms, to construction firms to dirt contractors. But many of the projects it entered into appeared to experience the same hiccups and cost overruns that conventional on-site construction projects sometimes encounter, and perhaps with less quality, as Katerra tacked on substantial costs related to re-work issues.
Katerra experienced nearly $2.8 billion in financial losses in 2018, 2019 and 2020.
Both Mercer and VAC were stalking-horse bidders whose original bids prevailed for their respective acquisitions.
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