Chicago-based CORE Industrial Partners, an investment firm specializing in middle-market manufacturing companies, has announced the acquisition of GPI Prototype & Manufacturing Services – a metal 3D printing bureau with a focus on direct metal laser sintering technology.
CORE completed the acquisition through its own subsidiary FATHOM, an on-demand 3D printing service provider with a portfolio of over 100 large-format systems across five facilities. Interestingly, the move marks the latest in a string of buyouts by the private equity firm, with four major investments in the last two months alone.
Ryan Martin, CEO of FATHOM, states: “GPI’s ability to leverage metal additive manufacturing accelerates both design cycles and time to market and further enhances FATHOM’s existing metal additive capabilities and our unique customer value proposition. We’re excited to work closely with GPI’s customers as a turnkey partner for on-demand manufacturing, providing a broad array of complementary services and an unparalleled customer experience.”
DMLS for the masses
Direct metal laser sintering, or DMLS, is a sub-technology within powder bed fusion and the heart of GPI’s business model. Since 2007, the company has been producing parts using aluminum, steel, titanium, Inconel, and cobalt chrome powders. It regularly works closely with Fortune 500 companies across a variety of sectors and holds ISO 9001, ISO 13485, and AS9100D certifications.
Matthew Puglisi, Partner of CORE, adds: “DMLS is one of the fastest-growing additive manufacturing technologies, both at FATHOM and broadly across the industry, and an important strategic focus as we seek to further strengthen FATHOM’s position as a leading on-demand manufacturer. GPI is widely respected as one of the original metal additive manufacturing services providers, and we believe the combination with FATHOM will be highly synergistic.”
The future looks bright for on-demand manufacturing
Looking at CORE’s history of business decisions, it’s quite clear the firm has a defined trajectory in mind. CORE acquired 3D printing service provider Midwest Composite Technologies in 2018, before buying out digital manufacturing specialist ICOMold and FATHOM in 2019. With GPI completing the square, all four 3D printing companies will be proceeding under the FATHOM brand.
Beyond just additive manufacturing, CORE also acquired a sheet metal engineering company and a photochemical etching specialist last month, in July. A decision to build a multi-technology, on-demand manufacturing empire appears in line with recent trends, with the World Economic Forum even listing ‘distributed manufacturing’ as a top 10 disruptive technology.
Product developers no longer need to set up their own supply chains to manufacture a prototype. The often inefficient in-house manufacturing process is almost entirely digitized and in the hands of more experienced organizations. With a vastly broader list of geographic options, components can also be manufactured closer to their final sale locations, ultimately reducing logistical costs and the barriers to entry for newcomers.
The fruits of the business model are especially apparent in some of this year’s Q2 financial results. Looking at Protolabs’ report, the company’s revenues remained relatively stable despite the ongoing pandemic (its injection molding division even saw a 4.3% increase), while many machine manufacturers took hits of 20% – 30%.
On the other end of the spectrum, Brooklyn-based Voodoo Manufacturing closed its doors for good, citing COVID-19 as the root cause. As with any investment, diversification should be used to spread risk. In Voodoo’s case, heavy investment in desktop FDM systems was quite the opposite, leading to the firm being unable to keep up in a hyper-competitive market space while limiting its client base.
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Featured image shows a selection of 3D printers in FATHOM’s expansive technology offering. Photo via FATHOM.