01 March 2022
In 2021 the Additive Manufacturing industry (otherwise known as AM or 3D Printing) has faced several challenges linked to Covid, so it was great to see a plethora of global companies exhibiting their latest technology at Formnext. It was pleasing to witness strong UK representation amongst the exhibitors across the wider ecosystem. A notable trend at Formnext was the recent influx of ‘post processing’ and software companies competing for space alongside the many AM printer manufacturers.
It’s well documented that AM has been around for over 30 years with adoption largely limited to rapid prototyping. That said the influx of new technology aligned with significant investment has seen more manufacturers utilising 3D printing for end-use product manufacturing. In 2020 the AM market had an estimated value of $12.6bn with several companies achieving unicorn status and there are early signs that the market is now starting to reach its significant potential. Indeed, industry analysts expect the sector to more than double over the next five years and investors have started to take notice.
M&A in AM
Future forecast growth has been a catalyst for M&A activity, with larger players entering public markets and beginning to consolidate the market. The last 18 months has seen several go public through mergers with Special Purpose Acquisition Company’s (SPACs), such as Desktop Metal, Markforged and Velo 3D listing within the period. Essentium is also expected to list on NASDAQ in Q1 2022.
This has driven increased deal values in M&A to record levels. For instance, Desktop Metal has completed six acquisitions in 2021, with the acquisition of EnvisionTEC, Meta and most recently ExOne in a deal worth over $500m. US based 3D Systems Corporation also made several acquisitions and non core disposals in 2021, adding to the many acquisitions they have made over the last 10 years.
The growth in the AM market has also attracted the interest of investors, securing significant venture capital investment from both Corporate Venture Capitalists (CVCs) and Venture Capitalists (VCs). Manufacturing platform Carbon is one of many AM companies to have successfully raised multiple rounds of venture capital funding, having raised over $680m to date with over $260m raised in its latest round.
2021 saw AM Ventures launch a €100m venture capital fund, the first fund dedicated solely to industrial 3D printing which is testament to the maturity of the AM M&A market. Going forward, we expect to see more VC’s drawn to the sector in the short term, with more mature private equity investors beginning to target the market in the next 3 years.
Steel city to global success
A company that is paving the way for 3D printing in the UK is Additive Manufacturing Technologies (“AMT”). AMT have developed a fully automated surface finishing technology platform, PostPro, which smooths and seals surfaces of 3D printed parts. AMT believe that their technology will play a crucial part in the expansion and widespread adoption of 3D printing by streamlining a time consuming and labour-intensive part of the process which currently accounts for c.60 per cent of the total part cost.
The Sheffield headquartered business has so far raised £18m in funding from investors including the DSM Venturing, Midwest Additive Ventures and NPIF (Mercia Equity Finance). AMT most recently raised £11m in Series B funding, led by Foresight Williams Technology along with Saint-Gobain Surface Solutions, 15th Rock Ventures and existing investors. Investment raised by AMT will be used to scale operations and develop their end-to-end PostPro DMS Platform.
“Although 3D Printing has been around for 20+ years, it is only now that we are starting to see the transition from low volume prototyping to end use manufacturing at scale. Our automated 3D Printed part finishing platform is enabling blue chip companies to manufacture everything from critical medical suppliers to industrial components” said Joseph Crabtree, CEO and Founder of AMT.
“We are proud that all of our current investors have recognized the progress we’ve made and are continuing to support our mission to provide automated finishing technology for every 3D Printer. This investment will allow us to commercialise and scale our end-to-end PostPro DMS Platform, for which we have already taken orders, and deliver on our vision of using 3D Printing as a viable manufacturing technology.”
A timeline of M&A transactions and SPACs in the AM sector
|June 2020||Desktop Metal and Carbon||GE’s interest in Desktop Metal and Carbon acquired by 40 North Ventures|
|July 2020||Clariant||Portion of Clariant’s 3D printing portfolio acquired by Royal DSM|
|September 2020||DSM||Royal DSM resins and functional materials business acquired by Covestro|
|December 2020||Origin||Acquisition by Stratasys
|January 2021||Hubs||Acquisition by Protolabs|
|February 2021||RPS||Acquisition by Stratasys|
|February 2021||EnvisionTEC||Acquisition by Desktop Metal|
|October 2021||AMT||Raised $15m in a Series B funding round|
|October 2021||Meta Additive Limited and ExOne||Acquisitions by Desktop Metal|
SPAC Listings and IPOs
|December 2020||Desktop Metal and Carbon||Listed on New York Stock Exchange through a SPAC at a valuation of $2.5bn|
|July 2020||Fast Radius||Listed on NASDAQ through a SPAC at a valuation of $1.4bn|
|July 2020||Markforged||Listed on New York Stock Exchange through a SPAC at a valuation of $2.1bn|
|September 2021||Velo||Listed on New York Stock Exchange through a SPAC at a valuation of $1.6bn|
|September 2021||Shapeways||Listed on New York Stock Exchange through a SPAC at a valuation of $410m|
|December 2021||Fathom||Listed on New York Stock Exchange through a SPAC at a valuation of $1.5bn|
A year of unprecedented valuations
Average deal valuations climbed steeply in 2021, driven by major acquisitions such as Desktop Metal’s acquisition of The ExOne Company and the numerous SPAC transactions.
RSM’s M&A team has advised on several deals in the AM sector. Most recently, advising the shareholders of Meta Additive on the sale to Desktop Metal, generating significant value for the shareholders.
RSM advised on the 100% share sale of Meta Additive, a pioneering additive manufacturing technology provider, to Desktop Metal.
RSM advised on the sale of LPW Technology, a leading provider of metal powders for additive manufacturing processes, to Carpenter Technology Corporation, a leading producer and distributor of premium speciality alloys, listed on the New York Stock Exchange.
RSM advised on the sale of Material Solutions, a leading additive manufacturing and post processing company, to Siemens.