Atlanta Contractor Acquired By Katerra Separates From Bankrupt Startup
After Katerra's sudden bankruptcy earlier this month, an Atlanta construction firm is declaring its independence.
Fortune-Johnson, an Atlanta-based general contractor focused on the multifamily industry, has separated from the one-time SoftBank-backed construction conglomerate, it announced Tuesday. Terms of the deal were not disclosed.
“We have retained our talented staff and are actively working with employees, clients and subcontractors to ensure a seamless transition,” Fortune-Johnson CEO Brett Fortune said in a statement. “We are completing all of our active projects and jobs that were under construction when we were with Katerra.”
Fortune-Johnson was acquired in 2019, one of several construction firms bought by prefabrication construction giant Katerra during its rapid growth over the past few years. Menlo Park, California-based Katerra made the deal soon after raising $865M in Series D funding, led by SoftBank, and its valuation reached $3B. But as Covid-19 hit the industry, Katerra faced "rapid deterioration" with its business, forcing the firm into Chapter 11 bankruptcy on June 7.
Before filing, Katerra had acquired a number of construction firms, including New Jersey-based Fields Construction and UEB Builders. But troubles soon hit Katerra, which had stopped work on at least six projects by November 2019. A round of layoffs followed in the spring and fall of 2020. Paal Kibsgaard stepped into the CEO role around that time, and SoftBank extended the company another $200M to keep operations going.
As part of its restructuring efforts, Katerra has been selling off a handful of companies, including Renovations and the architecture firm Lord Aeck Sargent, whose main office is located in Atlanta, the Atlanta Business Chronicle previously reported. Katerra plans to keep its international operations, a company spokesperson told The Wall Street Journal.
Fortune-Johnson focuses on multifamily, student and senior housing and mixed-use projects in Georgia, the Carolinas and Virginia and is currently building the $35M apartments that are part of the larger The Grove at Towne Center mixed-use development in Snellville for developers MidCity Real Estate Partners and Casto.
“This is the beginning of a new era for us,” Fortune said in a statement. “We will definitely continue to build on a strong foundation of trust, honesty, and integrity as we grow.”