Pioneering 3D printing provider Fathom to go public via $ 1.5 billion valuation SPAC deal – 3DPrint.com
3d printing company Breaststroke announced its merger with the blank check company Altimar Acquisition Corp. II in a multi-million dollar deal that will help expand its digital on-demand manufacturing platform through a series of planned acquisitions. Under the terms of the transaction, which is expected to close in the fourth quarter of 2021, the combined company would achieve an enterprise value of $ 1.5 billion and will be listed in New York Stock Exchange (NYSE) under the ticker symbol “FDMG”.
The deal will provide more than $ 420 million in net proceeds, including a fully committed $ 80 million private equity investment in public equity (PIPE) anchored by leading institutional investors. Fathom will increase its leadership in traditional and additive advanced manufacturing capabilities through this new business agreement and accelerate its continued investments in organic and inorganic growth opportunities to expand key capabilities of its growing customer base. In addition, the company currently has a strong pipeline of potential acquisitions, and when it goes public, it will be able to use its shares as the currency of acquisition. 3DPrint.com met with Fathom CEO Ryan Martin and Co-Founder and Chief Commercial Officer Rich Stump to discuss the deal and their vision for the company.
One of the early pioneers in on-demand manufacturing, Fathom played a big part in the existence of this space. With over three decades of manufacturing experience, the company leverages seven additive manufacturing technologies and adds what Martin calls the “innovation factor,” using additives alongside traditional techniques to solve problems. customer issues and move the industry forward. With the majority of its clientele made up of Fortune 500 leading companies and enterprises with some of the largest R&D budgets, Fathom tries to drive product innovation quickly.
“We looked at several different avenues to get the company public, but with Altimar we found the perfect match. From the start, we shared a vision of how we could grow the business and take it to the next level, ”said Martin. “We not only have top-line growth but also a strong free cash flow net result, so we believe this is a great investment opportunity. There is a lot of interest from investors who think this technology is going to change the way manufacturing is done, and they see tremendous growth with our business. So there is a tremendous trail ahead of Fathom as a full-scale player. “
Industry 4.0, the next wave of the industrial revolution driven by the digitization of manufacturing, including the commercialization of additive manufacturing complemented by advanced traditional manufacturing technologies and advances in software tools and AI, has created an opportunity Massive economy specifically for production parts in the $ 25 billion low- and mid-volume manufacturing spaces that make up Fathom’s addressable market.
Martin believes there are thousands of small, regionalized, very specialized and strong suppliers in this specific area. However, while many of them are very good at what they do, they usually specialize in just one manufacturing process.
“We see with Industry 4.0 trends as large corporate customers are trying to find vendors that offer a wider range of capabilities allowing them to accelerate product development and low volume manufacturing needs. Part of our goal has been to identify the leaders in this fragmented market, acquire them, and then integrate those capabilities into our platform. We already have a record of 13 acquisitions over the past three years. Nevertheless, with this new SPAC merger, we will not only continue to grow organically, but we will also have currency in the form of stocks and investments to continue our acquisitions. “
In 2019, Fathom was acquired by a Chicago-based private equity fund CORE Industrial Partners, and with another company previously acquired by CORE, Midwestern Composite Technologies, they formed one of the largest private providers of digital manufacturing services in North America. Fathom’s on-demand digital manufacturing platforms, combining a wide range of in-house additive and traditional manufacturing technologies, now offer customers hybrid solutions that uniquely blend additive, subtractive and formative technologies that push the boundaries of product design and development.
To meet the comprehensive product development and low to mid-volume production needs of some of the world’s largest companies, the company has more than 90 large-platform, nearly 450,000-foot additive manufacturing machines. square footage of manufacturing capacity in twelve facilities nationwide. In addition, Fathom uses its proprietary software platform to seamlessly combine the internal capabilities of plastic and metal additive manufacturing technologies.
Although Fathom’s platform is chosen by hundreds of companies across a wide range of industries, Stump and Martin have observed that specific areas are driving demand over the past 12 months; essentially, the medical space, electric vehicle startups, traditional automotive suppliers and the space industry.
“From an additive side application perspective, a big market that we focus on is what we call ‘the bridge to production’. As many companies attempt to bring more differentiated and complex products to market faster than ever before, they need comprehensive capabilities to push the boundaries of manufacturing constraints. This gap is a great opportunity, and obviously the additive is the bridge to production here, ”explained Stump.
As the company offers both plastic and metal 3D printing, leveraging all of their available technologies, Martin and Stump have indicated that they are seeing massive growth on the metal side. In addition, SLS explicitly attracts a significant portion of their business.
“The market is changing. We have reached the next industrial revolution with Industry 4.0, and consumers are more demanding than ever. Fortune 500 companies need to produce better performing and differentiated products to be competitive in the marketplace, so designs become more and more complex, and simplifying and consolidating the supply chain is a big deal, all. like the use of automation, robotics and 3D printing. Overall, we see a tremendous opportunity in the convergence of additive manufacturing with traditional manufacturing to push manufacturing constraints to our customers’ design specifications, ”continued Stump.
Fathom approaches the new deal in a strong financial position, generating $ 149 million in revenue in 2020 and seeing continued growth in 2021 from a revenue perspective. Upon closing of the transaction, Fathom’s senior management will continue in their current roles, including Martin as CEO, Stump as Commercial Director and Mark Frost as CFO. In addition, the company’s board of directors will include former executives from large manufacturing companies such as General Electric, 3M, Ingersoll Rand, and Chrysler. With Stifel and JP Morgan Securities as joint financial advisers, the company is on its way to becoming listed on the New York Stock Exchange.