Procore is one step closer to becoming a one-stop shop for the needs of the construction industry after the biggest acquisition in company history.
The giant is acquiring software company Levelset for $500 million. The acquisition includes approximately $425 million in cash and $75 million in Procore common stock, according to the Commercial Observer. The deal is expected to close in the fourth quarter.
Levelset was founded in 2007 as a company that helps facilitate lien payments for construction work. Its acquisition will allow Procore to add lien rights management to its suite of products on its platform, as well as some industry data assets, such as payments and compliance activity.
Levelset’s platform aims to help vendors and subcontractors better secure payments, a notoriously slow process in construction. According to Procore, the industry is one of the slowest to pay for work in the world, measuring up with a median 90 days for outstanding sales and 74 days of payable outstanding.
On a Procore conference call Thursday night, Levelset CEO Scott Wolfe Jr. reportedly echoed figures shown on the company’s website that say 250,000 users have used the platform for more than 6.5 million projects. The company has about 300 employees and is based in New Orleans.
Not only is the $500 million acquisition the biggest in Procore’s history, but it’s also one of the biggest for a venture-backed, construction software company, only dwarfed by the $900 million Autodesk paid for PlanGrid.
Procore in May launched its initial public offering, raising $634.5 million by selling nearly 9.5 million shares at $67 each. At the time, the company counted more than 10,000 customers, including major landlords like Brookfield and Lennar.
The company offers software that allows all parties involved in a construction project — including contractors, architects and owners — to stay in touch via the cloud. When it went public, Procore was valued at over $8.5 billion, or $9.6 billion when including employee stock options and restricted stock units.
[CO] — Holden Walter-Warner