In late December last year, Buildertrend announced that it had received an investment from Bain Capital Tech Opportunities, an arm of Bain Capital, and HGGC—both private equity investors—to grow and expand. The investment size was not revealed nor were plans for what specifically Buildertrend intended to do with the newfound capital; apart from Pil Meicler, a managing director at BCTO, saying in a statement that the partnership would “drive continued investment in product development, additional services to the contractor base and strategic acquisitions that will offer significant benefits to customers and the construction industry overall.”
We now know CoConstruct—which only two years ago received its own investment from private equity firm Serent Capital—to be one of those strategic acquisitions.
The futures of the construction management platforms
Where this leaves either of the platforms and its users remains a question, but leaders of both software companies appear to suggest that Buildertrend will absorb CoConstruct as a platform.
Donny Wyatt, CoConstruct founder and newly named advisor to lead integration efforts, said in a public statement, “We’re thrilled to bring together our complementary approaches and build an even stronger platform with the combined teams’ scale and shared culture of innovation.” He doesn’t mention CoConstruct by name.
Meanwhile in the same press release, Buildertrend Co-Founder and CEO Dan Houghton says that the acquisition “positions Buildertrend to significantly expand our market share and continue delivering innovative, value-added solutions that improve client success and efficiency.”
BCTO's representative Meisler described the acquisition as “the combination of these two companies,” which he said was “poised to disrupt the residential construction market.”
How the industry is taking the news
Long story short: remodelers are optimistic, but taking a "wait-and-see" approach. “Imagine Apple just acquired Microsoft, or vice versa,” says Mark Richardson, industry insider, author, and speaker. “Some would love it and some would hate it—many would be concerned about what this might mean. Buildertrend acquiring CoConstruct conjures up the same feelings.”
Dan Watson, chief financial officer for Neil Kelly, says that Neil Kelly has relationships with both Buildertrend and CoConstruct. As of now, they are midstream in an implementation with CoConstruct. Though Watson says there are always challenges with merging companies' cultures, he remains optimistic that there is a big opportunity with Buildertrend's industry experience and client base coupled with CoConstruct's technology platform and what he calls "sophisticated financial backers." Still, he says it will be a while until clients know if the merger will benefit all parties involved. "As a client and user of the acquired company it creates a nearer-term uncertainty of where this will leave us and with what voice, but longer-term if they execute properly, we expect to enjoy the synergy and advancements of this merger."
Josh McDermott, owner of J.T. McDermott Remodeling Contractors, says that he has friends who love certain aspects of each platform and thinks that it's a win-win situation for both companies if they play their cards right. "The key here will be for them to manage the merger of these two companies so that the best parts of both services are combined," McDermott says. "As we all know too well, if these mergers aren't done correctly there can be a lot of fallout for both customers and the companies."