According to Prototek, the deal allows it to form a “one-stop destination” for the low-volume manufacturing clients of both firms, with a full CNC machining, sheet metal and 3D printing offering. The agreement sees the companies continue to trade at their current locations, while allowing both to leverage a wider network than before, and Prototek to acquire new additive manufacturing capabilities.
“The Midwest Prototyping team will be a terrific complement to our core capabilities and will support our continued growth,” said Prototek CEO William Gress. “We can now meet all the prototyping and low volume production needs for our customers through a broad range of cutting-edge manufacturing capabilities and increased size, scale and efficiency, with the same high quality they’ve come to expect.”
“[Midwest President] Steve Grundahl and his team are a great fit for us, and we look forward to working together to provide end-to-end digital manufacturing solutions to our customers around the country.”
Prototek’s 30-year expansion
Based in New Hampshire, Prototek’s manufacturing offering dates back to 1987, but it has since scaled its capabilities, and it now’s able to market prototyping, machining and sheet metal fabrication services to clients ranging from the medical to electronics sectors, thanks to its machine-packed 100,000 sq. ft workspace.
Elsewhere, the firm offers to engrave, finish and plastic thereform parts, as well as carry out related Quality Assurance (QA) and assembly services for customers. Owing to its ISO 9001:2015 and ITAR certifications, Prototek has also been able to conduct production runs for several high-profile clientele, including NASA, Google and the U.S. Army.
The company’s rapidly growing technical expertise and production capacity saw it acquired by CORE Industrial Partners in 2017, but it was later sold on to Snow Phipps, which was succeeded by TruArc Partners. At the time of Snow Phipps’ purchase, its Operating Partner Jay Twombly pledged to give Prototek “the resources needed to execute its expansion,” and it now appears to be fulfilling that promise.
Buying into 3D printing
Although the exact terms of Prototek’s acquisition haven’t been disclosed, it’s understood that the deal has already been finalized, with the transaction taking place on July 15 2021. During negotiations, Parker Poe Adams & Bernstein served as legal counsel to Prototek and its parent firm TruArc Partners, while Murphy Desmond carried out the same role for Midwest Prototyping.
The agreement sees the companies merge, with Gress continuing in his role as CEO of Prototek, and Grundahl serving as VP of Additive Manufacturing. In his new role, Grundahl will effectively be responsible for leading the firm’s digital manufacturing growth strategy, with Midwest Prototyping set to form the foundation of an aggressive expansion plan moving forwards.
“Bill and the team at Prototek are the right partners for us at this pivotal time in our development,” said Grundahl. “Digital and on-demand manufacturing are experiencing significant tailwinds. Joining Prototek gives our employees greater opportunities for growth, and we’re thrilled to bring even more resources and flexibility to our customers.”
For its part, Prototek says that the deal enables it to serve a “more geographically diverse” client base, via its technology hubs which now stretch from the Northeast, to Silicon Valley and the Midwest. While it’s unclear if Midwest Prototyping will continue trading under the same name, the firms have essentially combined to form an entity with 237 staff, and a whopping portfolio of more than 140 machines.
“We recently acquired Prototek to support its growth prospects and expansion into digital and on-demand manufacturing,” added John Pless, a Partner at TruArc Partners. “Merging the Midwest Prototyping team and additive manufacturing capabilities with Prototek’s already robust offerings is a great first step to advance this strategy.”
“We expect this to be the beginning of significant additional investments in organic and inorganic initiatives, that will position the company to capitalize on a dynamic industrial manufacturing market.”
Is digital manufacturing booming?
Prototek’s decision to buy Midwest Prototyping comes at a turbulent time within the on-demand manufacturing sector, in which its competitors are also raising significant capital to fund expansions of their own. Earlier this week, digital service provider Fast Radius revealed that it aims to go public via a SPAC merger, raising $80 million later in 2021.
Likewise, back in April 2021, Shapeways announced its intention to merge with Galileo Acquisition as a means of going public on the NYSE. Through the deal, Shapeways stands to generate $195 million in net proceeds, which it has earmarked for building on its capacity in order to meet its lofty revenue growth ambitions.
Xometry, meanwhile, has also chosen to publicly list its shares, but on the NASDAQ Global Select Market, and via a traditional IPO rather than following the industry’s SPAC merger trend. Shortly before launching its IPO, the firm upped the value of its shares, in a move that could now see it raise north of $290 million in capital.
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Featured image shows one of Prototek’s subtractive manufacturing machines in action. Photo via Prototek.