Under the terms of the deal, CORE Industrial Partners is set to remain the largest shareholder in the newly-combined firm, which has begun trading publicly for the first time under the ‘FATH’ ticker on the NYSE. Having previously estimated that the move would see it raise up to $80 million in funding, Fathom has now outlined plans to invest in “promising new technologies across the industry” moving forwards.
In the week since their initial flotation, Fathom’s shares have fluctuated in value, falling from a pre-listing high of $10.53 to a low of $6.48, before stabilizing at around the $7 mark.
“We are taking this step because we are a strong, profitable company, and believe our NYSE listing will accelerate Fathom’s growth, both organically and inorganically, by using our stock as a currency to advance our M&A strategy,” said Fathom CEO Ryan Martin. “These new technologies will enable us to serve our target markets with greater efficiency and responsiveness than ever before.”
Fathom Digital Manufacturing’s IPO
Based in Hartland, Wisconsin, Fathom markets rapid prototyping and low-volume production services via its extensive in-house manufacturing capacity. Across its 12 individual facilities, the firm offers more than 25 different production processes, ranging from CNC machining and injection molding to 3D printing, enabling it to address defense, aerospace, medical and automotive applications.
In order to market its services effectively, Fathom has established a patented online quoting platform, which allows users to instantly assess the cost of realizing uploaded designs, and the firm has continually invested in its software offering.
During February 2018, Fathom launched an open-source Crystallon plug-in for the Rhino and Grasshopper3D modeling programs, an add-on specifically designed to meet users’ lattice design needs. Not long afterwards, the firm also began working with Stratasys reseller GoEngineer, in a move that saw the two combine their offerings with the aim of accelerating 3D printing’s cross-industry adoption.
Since then, the company’s efforts appear to have paid dividends, with the United States Marine Corps using its services to build modular logistics vehicles. What’s more, Fathom has consistently ranked among the US Inc 5000’s fastest-growing private firms, and following the completion of its IPO, CORE Industrial Partners’ John May says it has now “solidified its position at the forefront of the sector.”
“The company’s unique on-demand platform and diverse offerings are perfectly suited to the challenges and opportunities facing manufacturers today,” said May, Founder and Managing Partner of CORE Industrial Partners. “We are extremely proud of the incredible growth and innovation the Fathom team has achieved over the past three years, and we’re excited to remain Fathom’s largest investor.”
“We are confident Fathom’s solid foundation will enable the company to achieve further success in the public markets.”
Better accessing a $25 billion market?
Once approved by the shareholders of Altimar Acquisition, Fathom’s combination with its SPAC partner was concluded on December 23, 2021, paving the way for it to go public four days later. As part of the merger, it was agreed that the amalgamated firm will retain the ‘Fathom’ moniker, as well as its experienced CEO Ryan Martin, CFO Mark Frost, CCO Rich Stump and Board Chairman TJ Chung.
When first announced in July 2021, it was estimated that the deal would value the combined company at $1.5 billion, and see it raise $80 million via a Private Investment in Public Equity or ‘PIPE’ at $10.00 per share. Although Fathom has yet to confirm whether its share offering attracted the desired interest from investors, it is thought that the move has raised the capital needed to rapidly expand its offering.
In particular, the company says that broadening its portfolio allows customers to iterate their products more rapidly and better in-source to secure their supply chains, in a way that continues to “secure it new business wins” with large clients, and creates a “long runway for growth in the fragmented $25 billion low-to-mid volume manufacturing market.”
“This transaction allows us to continue to invest in Industry 4.0 to further solidify our market leading position and to better serve our customers through our expanding state-of-the-art capabilities,” said Chung. “Fathom’s highly experienced leadership team has successfully leveraged CORE’s knowledge and experience to get us to where we are today, and we’re excited at the prospects of what’s to come.”
3D printing’s SPAC-merging trend
Since Desktop Metal went public on the NYSE via a SPAC merger in late-2020, the 3D printing industry has been awash with firms seeking to similarly harness renewed public interest in the technology, as a means of raising funding from investors.
Just last month, industrial 3D printer manufacturer Essentium revealed that it too plans to go public by merging with a SPAC, in a deal valuing the combined firm at some $974 million. Set to go through by the end of Q1 2022, the transaction could see the resulting enterprise raise $346 million in funding, which it plans to plow into driving its organic growth.
Fathom’s IPO also follows similar moves from Shapeways and Velo3D, which are both now listed on the NYSE as well, after completing their respective SPAC mergers in November 2021. While the former raised $103 million in gross proceeds from its transaction, the latter landed around $274 million, funding it now intends to use to expand in Europe and back the launch of its Sapphire XC system.
Elsewhere, the likes of Xometry have chosen to go public via more conventional means, and the company conducted a $252 million IPO without SPAC involvement in June 2021. Using the funding raised through the transaction, the firm has since gone on to acquire Thomas for $300 million, in a deal that’s expected to significantly expand upon its buyer and seller base.
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Featured image shows a selection of 3D printers installed at one of Fathom’s facilities. Photo via Fathom Digital Manufacturing.