BuildDirect exits CCAA with US $28M new funding led by Mohr Davidow Ventures

BuildDirect has raised US $28 million of new funds and converted US $15 million of DIP financing provided during the CCAA proceedings for a total raise of US $43 million led by Mohr Davidow Ventures (MDV). Additional new and existing investors that participated in the round include Fidelity Investments Canada ULC, Pelecanus Investments Ltd., Lyra Growth Partners Inc., and Beedie Capital.

BuildDirect filed for protection on October 31, 2017.

BuildDirect secured creditors agreed to convert US $58 million of debt to equity, with the result that only US $4 million of debt remains at emergence.

At the filing, BuildDirect outstanding indebtedness consisted of #SUBSCRIBERS ONLY CONTENT Where did you get your news today? Tired of all the news with nothing but copying/pasting or paraphrasing? Get insights and see our research on this and all other subscriber ONLY news. Subscribe today and see what you have been missing and be informed.#

Effective March 22, 2018, BuildDirect has emerged from protection under both CCAA in Canada and Chapter 15 of the U.S. Bankruptcy Code.

“In addition to reducing our cost structure and strengthening our balance sheet to support our long-term business objectives, we have a renewed focus on professionals which include contractors, builders and interior designers,” said Dan Park, CEO of BuildDirect. “Today marks a defining moment for BuildDirect and I am confident customers and sellers alike will soon recognize the signs of a newly energized and well capitalized business poised for success.”

BuildDirect’s mission is to make commercial and home improvement projects simple. While the company will continue to service homeowners, professional contractors (Pros) are an integral part of the industry and are currently underserved. Further, homeowners who are increasingly shopping online for better prices, wider selection, and convenience, often rely on contractors for product sourcing. Last year, BuildDirect launched a loyalty program for contractors — BuildDirect Pros — and today, Pro sales account for more than one-third of the Company’s revenue and is growing quickly.

“We are very bullish on the shift towards professional contractors,” said Katherine Barr, General Partner, Mohr Davidow Ventures. “BuildDirect is pursuing a very large market opportunity and we believe that the company’s assets, capabilities, and executive leadership uniquely position the Company to be extremely successful moving forward.”

“We have many people to thank as this successful outcome is a result of the steadfast support of our employees, board of directors, investors, sellers, and everyone else involved in the process,” added Park. “With the financial restructuring now behind us, we look forward to continuing to provide high quality home remodeling products from around the world at a great price to our customers.”

BuildDirect’s exclusive financial advisor was Canaccord Genuity Group Inc. Its legal advisors were Fasken in Canada and Perkins Coie LLP in the United States. Its court appointed monitor was PricewaterhouseCoopers Inc.

photo credit: BuildDirect

Ted Liu

Ted Liu, M.Sc. (Mining), MBA (Finance), is the Editor of Private Capital Journal and CanadaMetals.ca, and former Editor of Canadian Private Equity. Ted has been passionately tracking Canadian private capital industry since 1992, most recently served as Research Director for The Canadian Venture Capital and Private Equity Association (CVCA). Ted was the architect of CVCA infobase, and is the architect of CPE Media's Financings.ca, the most sophisticated and advanced all private capital and public market financing database.