Maroc - STOREYS.COM - A La Une - 22/Apr 20:39

Nexii Building Solutions To Be Sold For $3M, Two Years After $2B Valuation

Four months after filing for creditor protection under the Companies' Creditors Arrangement Act (CCAA) in January, a buyer has now been found for Nexii Building Solutions, subject to approval from the Supreme Court of British Columbia. Nexii Building Solutions — a green construction products company whose crown jewel is a proprietary low-carbon concrete alternative called "Nexiite" — sought out creditor protection after finding itself in significant financial difficulties. In an affidavit sworn on January 10, CEO Bill Tucker said the petitioning group of companies — including subsidiaries Nexii Construction Inc., Nexii Holdings Inc., and NBS IP Inc. — "face significant liquidity constraints and are in default to their creditors, including suppliers and their primary secured creditors, all of whom are collectively owed more than $80M USD."Tucker also said that Nexii was "not able to raise additional capital through equity" and that its senior secured lenders were no longer making further funding available. Regarding the company's existing loans, Nexii failed to pay the amounts owed beginning in April 2023, with senior secured lenders making demand for payment in June 2023.Although companies usually file for CCAA creditor protection in order to secure breathing room from creditors that would allow the company to restructure and hopefully continue operating, Nexii's goal from the beginning was always to sell the business. "Nexii intends to move quickly to initiate a sale process, and to have that process approved by this Court on the next application in these proceedings," the company said in its initial petition to the court seeking creditor protection. "The sale process is intended to canvass the market for interest in Nexii's business so as to identify one or more transactions that will maximize value for stakeholders and, to the extent possible, preserve Nexii's business as a going concern to the benefit of stakeholders in Canada and the US."The Supreme Court granted Nexii's creditor protection petition on January 11 and approved the sales process on January 22. The SaleIn a report to the Court dated April 19, the court-appointed Monitor, KSV Advisory, said that it began the sales process by sending out teasers to 188 interested parties, which consisted of "Canadian and US operators in the construction industry, financial groups and other strategic parties." The bid deadline was set at March 7, and a total of 26 interested parties progressed to the stage of signing non-disclosure agreements, but the Monitor noted that they ultimately did not receive any bids that it found satisfactory. The bid deadline was then extended indefinitely, during which a successful bid was found, following negotiation, with the parties entering a sale agreement on April 19. The buyer that was found is a group that consists of 15925347 Canada Inc., 1474480 BC Ltd., 1474737 BC Ltd., 1474741 BC Ltd., 1464115 BC Ltd., and 1474484 BC Ltd., which the monitor notes "are entities that are controlled by existing senior management of the Nexii Group." According to its website, Nexii Building Solutions' senior management team currently consists of CEO Bill Tucker, Executive Vice President of Strategy and Partnerships Gregor Robertson (formerly the Mayor of Vancouver), Co-Founder and Senior Vice President of Product Development Ben Dombowsky, Co-Founder and Vice President of Building Technology Michael Dombowsky, and others. Robertson's LinkedIn, however, states that his tenure at Nexii ended in November 2023.STOREYS has reached out to Nexii seeking clarity on which members of the senior management team control the entities, but has not received a response. According to the report by the Monitor, the closing consideration — purchase price minus transaction costs — for the transaction is $3M. The Monitor will be presenting the sale agreement to the Court for final approval on Friday, April 26. The sale is unlikely to be rejected, as the Monitor notes that there were no other qualified bids and that no superior bids are likely to surface even if given more time.The assets included in the transaction consist of a majority of Nexii Building Solutions' business, but a portion of its assets are being excluded. According to the Monitor, they are currently engaged with several parties who have expressed interest in acquiring the remaining assets. Those remaining assets consist of several contracts, according to the asset purchase agreement, and the Monitor will seek out separate approval for the sale at a later date.Nexii Building SolutionsFor Nexii Building Solutions, the sale of its assets for $3M is a far cry from the company's $2.05B valuation, which the company announced in July 2022. In September 2021, Nexii also announced that it had become the fastest company in Canada to reach "unicorn" status — a valuation of $1B or more. The company became a beacon for sustainable construction and was featured in the New York Times, which described Nexii as "a rising star in the expanding green building industry."Locally, in British Columbia, the company received plenty of attention due to the involvement of Gregor Robertson, who served as the Mayor of Vancouver from 2008 to 2018. If the sale is approved this week, the company's assets will be turned over to members of its existing senior management team, who are already familiar with business and are in good position to continue serving the contracts. The Monitor cited this as a core reason why it is recommending the sale be approved. Simultaneously, the Monitor is also seeking an extension of the creditor protection to June 30, which would provide time to close the transaction as well as finalize a transaction for the remaining assets.