Private equity firm CORE Industrial Partners has announced the takeover of 3D printing service provider RE3DTECH.
Utilizing its portfolio of FFF, DMLS and MJF machines, RE3DTECH is capable of creating end-use parts in high volumes, which many of its clients apply in demanding areas such as the defense, automotive and aerospace sectors. Through buying the firm, CORE Industrial Partners therefore hopes to expand its share of what it sees as an emerging industrial market, and establish a “new 3D printing platform.”
“Our investment in RE3DTECH represents an expansion of our thesis within the additive manufacturing sector to address the growing market for high-volume production needs,” said CORE Industrial Partners’ John May. “We believe CORE’s sector expertise and resources will prove highly impactful in accelerating the company’s growth, both organically and through complementary acquisitions.”
CORE’s expanding service offering
Based in Chicago, CORE Industrial Partners has so far made $700 million worth of capital commitments on behalf of investors, mainly in US manufacturing and industrial technology-related firms. While some of the companies in this portfolio only market sheet metal fabrication or subtractive technology-based services, many offer to create parts via multiple processes, including 3D printing.
One such firm, Fathom, which markets rapid prototyping and low-volume production services, went public on the NYSE last week, in a move that was said to allow it to raise $80 million in funding. Carried out as a Special Purpose Acquisition Company (SPAC) merger, the deal saw many new investors buy shares in the combined business, but CORE Industrial Partners remains its largest shareholder.
The company is also currently an investor in 3DXTECH, manufacturer of the Gearbox HT2 3D printer, carbon fiber filament developer, and production service provider, plus it has backed Prototek in the past as well, a rapid prototyping firm that bought into 3D printing by acquiring service bureau Midwest Prototyping in July 2021.
CORE Industrial Partners’ purchase of RE3DTECH can therefore be seen as part of an ongoing investment strategy, focused on backing 3D printing-equipped bureaus. In terms of its latest deal, one of the firm’s Partners, Matthew Puglisi, says that it has been prompted by RE3DTECH’s impressive growth, as well as the rapid production capabilities developed by its team based nearby in Chicago.
“RE3DTECH’s strong growth since inception is the direct result of the company’s combination of talented employees, breadth of additive manufacturing technologies, design and engineering capabilities and quick turnaround times,” added Puglisi. “We look forward to building upon the company’s solid foundation to further expand its service offering and geographic reach.”
Acquiring a ‘new 3D printing platform’
With its purchase of RE3DTECH, CORE Industrial Partners has announced the foundation of a “new 3D printing platform,” indicating that it’ll be traded separately to any of its other related businesses. This platform will be powered by the suite of machines it inherits from RE3DTECH, which is known to include HP’s 4200, 5200 and 580, as well as Markforged’s X7, Mark 2 and Metal X 3D printers.
In the process of buying RE3DTECH, CORE Industrial Partners has also acquired its fleet of SLM Solutions SLM 280, EOS EOSINT M 280 and Arcam EBM Q20plus systems. Designed to feature multiple lasers, fully-automatic operation and a large 350mm x 380mm build volume respectively, these machines are built for throughput-oriented 3D printing.
CORE Industrial Partners’ acquisition therefore sees it inherit significant DMLS, MJF and carbon fiber-reinforced part 3D printing capabilities, which are currently used to not only create production-grade components for clients in the aerospace and automotive markets, but those operating in the wider industrial, consumer and medical sectors as well.
For RE3DTECH, on the other hand, its President Jim Teuber says that CORE Industrial Partners’ takeover should allow it to leverage the wider resources of its new parent firm, as a means of expanding on its current service offering.
“RE3DTECH was founded with the mission to provide our customers with customized solutions utilizing the latest, state-of-the-art technologies,” explains Teuber. “Our partnership with CORE will help unlock the resources necessary to continue investing in cutting-edge capabilities and further enhance our customer value proposition.”
Investment in service bureaus soars
Investor interest in 3D printing service providers has hit new heights over the last six months, many of which have opted to go public via SPAC mergers, in an attempt to turn this goodwill into funding for their respective expansions.
In one such deal, during July 2021, Fast Radius agreed to combine with ECP Environmental Growth Opportunities, as a means of going public on the Nasdaq exchange. When signed, it was anticipated that the move would see the amalgamated business raise $445 million in funding, which has been earmarked for helping to meet its goal of bringing in $635 million per year by 2025.
However, not all these SPAC mergers have gone on to raise the capital they were initially expected to. Shapeways, projected that its IPO would raise $195 million in gross proceeds, but after the transaction went through, it was revealed that the deal only generated $103 million. In this case, it could be argued that investors’ concerns were well-founded, as Shapeways slashed its FY guidance late last year.
Xometry also chose to harness rising investor interest in 3D printing in 2021, but went public not via the SPAC mergers becoming ever-present in the industry, but through a traditional IPO instead. Ultimately, the transaction attracted even more investor attention than anticipated, with the firm generating $252 million in capital rather than the $302 million first projected.
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Featured image shows RE3DYTECH’s shop floor, complete with DMLS, FFF and MJF-capable 3D printers. Photo via CORE Industrial Partners.