KEF Infra merges with Katerra; targets 3-fold surge in revenue
dubai — Offsite infrastructure manufacturing company KEF Infra, part of Dubai-based KEF Holding, which has announced a strategic merger with US-based modular home-maker Katerra, said on Monday that the combined entity seeks to more than treble revenue to $3.5 billion within a year from $1.1 billion at present.
The partnership also seeks to jointly expand geographic reach, particularly the UAE and other GCC countries, India and the US, and boost manufacturing capacity and market expertise.
Faizal Kottikollon, founder and chairman of KEF Infra, which has already made its mark in India as an offsite building technology specialist, said the prospects of such a strategic alliance between two trailblazers in cost-efficient robotic offsite building technology and design look brighter in the $10 trillion global construction industry.
“We look forward to breaking new grounds with a like-minded team, particularly in the Middle East because government support has led to burgeoning investment opportunities, making this region a potential growth market for KEF Katerra. We will also expand our
KEF Katerra will be actively engaged in building critical infrastructure such as hospitals and schools across India
Faizal Kottikollon, Founder and chairman, KEF Infra
footprint to other geographies in India beyond our current markets,” said Kottikollon.
Ash Bhardwaj, president, Katerra Asia, speaking to Khaleej Times at KEF’s Dubai office, said the merged company already has more than $3.7 billion in bookings and $8 billion worth of projects in pipeline across North America and India.
He said both companies, employing a vertically integrated model to offer end-to-end building services enhanced by offsite manufacturing and enterprise technology, have been radically revolutionising building technology by cutting 50 per cent on construction time and 5-10 per cent cost.
“The vertical integration of all disciplines from architectural design, structural design and engineering, MEP and finishes and overall project planning and execution will allow for integrated project delivery, which is lacking in construction today,” said Bhardwaj.
Merger value?
Both companies refused to disclose the value of the merger. However, it has been learnt that KEF Infra would receive several hundred million dollars in cash and stock. The merger offers the Menlo Parkbased Katerra access to commercial clients, including IT giant Infosys Ltd, and the massive construction markets in India and the Middle East.
The merger will enable KEFKaterra to bring world-class precast concrete technologies to the US market, greatly expanding design and materials options for its Katerra’s clientele. At the same time, the merger will result in a more robust global supply chain and elevated manufacturing processes in existing KEF market, said Bhardwaj. Kottikollon said since Katerra is a pioneer in multifamily housing design, build and delivery, there is a big potential for replicating its model to other regions of India, which will be key geographies for the KEF Katerra expansion.
“In addition to addressing housing needs, KEF Katerra will be actively
engaged in building critical infrastructure such as hospitals and schools across India,” he said. Katerra operates globally, and was most recently valued at $3 billion, and investors include Softbank, Foxconn, and Canada Pension Plan Investment Board.
Founded in 2014, KEF Infra, which uses robotics and automation to deliver high quality building projects more quickly and efficiently, has 1,400 employees and factories in Krishnagiri and Lucknow in India. Katerra currently employs more than 2,000 people with operational factories in Greater Phoenix, Arizona Glendale, Arizona and Shanghai, China.
Once the merger is complete in third quarter 2018, the company will have over 3,400 employees, with a global footprint of 20 locations in the United States, China, India, Mexico and the Middle East.
— issacjohn@khaleejtimes.com