Massachusetts-based 3D printer manufacturer Desktop Metal has concluded its merger with blank check firm Trine Acquisition, and gone live on the New York Stock Exchange (NYSE).
Now that the deal has been approved by Trine’s board of directors, the combined company named ‘Desktop Metal, Inc,’ has been listed on the NYSE under the ticker ‘DM.’ In addition to being traded publicly for the first time, Desktop Metal has gained $580 million in funding from Trine’s trust account as part of the agreement.
“Today is an exciting moment and major milestone for our company and for the AM industry at large,” said Ric Fulop, CEO of Desktop Metal. “We are excited to bring Desktop Metal to the public markets, and offer everyone the opportunity to invest in a company aiming to transform the manufacturing industry.”
The mechanics of Desktop Metal’s merger
Desktop Metal and Trine have merged under a definitive business combination agreement, which sees Desktop’s shareholders retain 74 percent of the shares. Leo Hindery Jr and HPS Investment Partners, an investment firm that manages $60 billion in assets, previously led Trine, and the former will now join Desktop’s board.
Trine currently holds a $300 million trust fund, and the deal will see that number upped to $580 million by investors, to provide fresh backing for the new firm. Now that the merger has been completed, the combined business will reportedly be able to use this war chest to boost its R&D and “capitalize on growth opportunities.”
At time of writing, the NYSE hasn’t reported any figures yet, but an initial equity appraisal valued the company at around $2.5 billion. As a result, depending on Desktop Metal’s performance on the exchange, the newly-merged business could stand to raise further funding towards its planned expansion in the years ahead.
The trends behind Desktop Metal’s IPO
Desktop Metal’s IPO comes at a good time, as the NYSE has shown a strong appetite for the stock of technology firms with growth potential. Food delivery firm DoorDash saw its shares rise by 86 percent during its first day trading on Wednesday, which could be a good sign for Desktop Metal ahead of its imminent flotation.
Rental business Airbnb is also going public, and even though this will take place on the Nasdaq, it reflects a growing movement by some private firms towards trading publicly. The company has also priced its IPO at $68 per share, which is above its marketing range, further indicating its confidence in a successful first day.
In terms of Desktop’s merger, a Special Purpose Acquisition Company (SPAC) has been traded on the NYSE under the symbol ‘TRNE,’ while the IPO deal was being finalized. The joint-firm’s shares have risen from $12.80 to $24.77 since the start of December, and increased by 5 percent in the last 24 hours alone.
These figures bode well for the company ahead of its first day on the NYSE, and using a SPAC as a fundraising launch vehicle has proved to be a profitable route for several other firms. For instance, 40 percent of September’s U.S. IPOs were conducted using SPACs, and they raised over $31 billion on the public market.
Now that the merger has been completed, the SPAC has been disbanded and the shares will automatically convert to the new business, but the performance of Desktop’s launch vehicle bodes well for its future valuation.
Desktop Metal’s additive potential
Desktop Metal offers a broad range of binder jetting services to clients in the automotive, aerospace and consumer products industries. The company’s main portfolio of machines include its desktop Fiber HT and LT systems, and its first metal binder jetting 3D printer for machine shops, which it rolled-out last month.
Since its merger was revealed, Desktop has continued to build on its portfolio, earning a contract from the U.S. Department of Defense, and launching a new pure copper filament, but its IPO has had a wider industry impact. Other binder jetting firms such as ExOne and voxeljet have been the biggest beneficiaries.
Shares in both companies jumped by over 19 percent following the announcement of Desktop’s deal, reflecting investor confidence in the potential of the technology. The 3D printing community has also come out in support of the IPO, with figures such as the CVO of AM Ventures Arno Held, calling it a “bold move but the right one.”
“The company has a distinct first-mover advantage over competitors and the injection of capital from this transaction, a large portion of which will be dedicated to continuous product innovation,” concluded Fulop. “We believe the AM industry is at a major inflection point and that Desktop Metal is at the forefront of this transformation.”
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Featured image shows Desktop Metal CEO Ric Fulop ringing the opening bell on the NYSE. Photo via Desktop Metal.