Lacking investment infusion, U.S. modular housing leviathan Entekra fails.
Entekra, one of the leading players in U.S. offsite construction for commercial and residential framing, has announced that it will shut down operations within the next two months. (main pic: Entekra's first modular-built house in the U.S.)
Louisiana-Pacific Corporation (LP) which became the majority owner of the company in 2021 after investing USD$45 million in 2018, published a statement explaining that Entekra's long-term success requires scalable operations through regional expansion and greater capacity, which necessitates increased capital investment.
According to the statement, the company's board of directors carefully considered various strategic alternatives and concluded that without external investment, it led them to the difficult decision to cease operations and dissolve the company.
An orderly wind-down of operations is expected to be completed by the end of June 2023, with all employees being provided severance benefits.
The shut-down will impact up to 240 associates, with 200 in Modesto, CA, manufacturing and distribution operations in the United States, and 40 in Monaghan, Ireland.
Entekra's closure, given the messaging of a glowing proof-of-concept and ambitious growth expectations in commentary to investment analysts at an LP Q3 2021 earnings call, is all the more surprising.
LP CEO Brad Southern had noted that Entekra was "gross profit positive in the quarter, and continues to gain customer acceptance and operational momentum."
LP had installed long-time LP executive Neil Sherman to take over as president of Entekra after founder, offsite construction evangelist's Gerry McCaughey's exit from the business.
Original source: https://builtoffsite.com.au
