Massachusetts-based 3D printer manufacturer Desktop Metal has agreed to merge with blank check company Trine Acquisition Corp in order to go public with its 3D printing business.
The move, which could raise up to $575 million of investment for the company, will see it listed on the NYSE with the ticker symbol “DM” and an estimated equity valuation of $2.5 billion. Desktop Metal plans to use the additional funding to accelerate its growth, and to capitalize on the growing number of firms adopting 3D printing to make their supply chains more flexible.
Following Desktop Metal’s announcement, shares in other metal 3D printer manufacturers rose, with investors seeing the move as a sign of confidence in Desktop Metal’s technology. ExOne’s shares increased by 3 percent shortly after the agreement was revealed, while German machine producer’s voxeljet’s shares grew by 13 percent.
“We are at a major inflection point in the adoption of additive manufacturing, and Desktop Metal is leading the way in this transformation,” said Ric Fulop, Co-founder, Chairman & CEO of Desktop Metal. “We are energized to make our debut as a publicly-traded company and begin our partnership with Trine, which will provide the resources to accelerate our go-to-market efforts and enhance our relentless efforts in R&D.”
Growing confidence in metal 3D printing
Desktop Metal has an increasingly-broad suite of additive services. The company serves markets in 60 countries, and its parts are used in industries ranging from automotive and aerospace to consumer products. During 2019, the firm launched three new systems, including the desktop Fiber HT and LT machines, and its first metal binder jetting system for machine shops.
The Shop System comprising a 3D printer, powder station, and furnace, is designed to integrate into existing CNC shop operations. Desktop’s machine is able to produce a batch of complex parts every six to 12 hours, enabling the 3D printing of up to 70 kg of steel per day. To accelerate machine shop productivity, users can also create builds with a variety of parts, eliminating long processes and reducing costs for low volume batches.
Desktop Metal began shipping its Studio line of 3D printers in Europe last year, with customers including Germany’s BMW Group, and Italy’s Politecnico Di Milano and Add+It. Partnerships with injection molding part producer Indo-MIM and digital manufacturer Fast Radius followed as Desktop Metal continued to expand the applications of its technology.
Investors have repeatedly acknowledged the potential of Desktop Metal’s 3D printing technology via a series of funding rounds in recent years. In July 2017, the company raised $115 million to bring its metal additive systems to market, and this was followed by a further $160 million investment by Koch Disruptive Technologies in January 2019.
Desktop Metal’s independent research has predicted a ‘second wave’ of 3D printing innovation which it refers to as “additive manufacturing 2.0.” The new applications unlocked with the help of Desktop’s metal manufacturing technologies will reportedly raise the value of the industry from $12 billion to $146 billion by 2030. By going public, the company is now seeking to capitalize on its position within the industry and re-invest to reinforce its position.
Desktop Metal going public on the NYSE
Desktop Metal is going public via a definitive business combination agreement with Trine Acquisition Corp. Trine is a special purpose acquisition company, led by Leo Hindery Jr and HPS Investment Partners, a global credit investment firm with over $60 billion in assets under management.
The deal will see Trine, which currently holds $300 million in cash in trust, combined with Desktop Metal at an estimated $2.5billion pro forma equity value. Desktop Metal’s existing shareholders will hold around 74 percent of the combined company’s shares, assuming that there are no redemptions on the part of Trine’s public stockholders.
Any cash proceeds in the transaction will be funded by Trine’s cash in trust fund and a $275 million fully-committed common stock PIPE at $10.00 per share. Additional investments will be contributed by Miller Value Partners, XN, Baron Capital Group, Chamath Palihapitiya, JB Straubel, and HPS Investment Partners.
According to a statement issued by Desktop Metal, the boards of both companies unanimously approved the transaction. The completion of the proposed merger is dependent on the further approval of both firms’ stockholders and other market conditions but is expected to be completed by Q4 2020.
“After evaluating more than 100 companies, we identified Desktop Metal as the most unique and compelling opportunity, a company that we believe is primed to be the leader in a rapidly growing industry,” said Leo Hindery, Jr., Trine Acquisition’s Chairman, and CEO. “Ric has put together an exceptional team and board of directors with whom we are excited to partner to create the only publicly traded pure-play Additive Manufacturing 2.0 company.”
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Featured image shows a group of Desktop Metal 3D printers. Image via Desktop Metal.