3D printing service bureau Shapeways is preparing to go public via a merger with Special Purpose Acquisition Company (SPAC) Galileo Acquisition Corp (GLEO), sources have told Reuters.
According to people familiar with the matter, Shapeways is closing in on an agreement that will see it merge with Galileo to form a new $410 million firm, and become listed on the NYSE. The deal effectively shows that this year’s SPAC boom remains alive and well, after recent interest had appeared to tail-off following accounting changes made by U.S. regulators.
See end of article for updated confirmation.
Shapeways’ ever-expanding offering
Founded in 2007, Shapeways provides a broad suite of 3D printing, injection molding and urethane casting services, that allow clients to rapidly produce on-demand parts. In terms of the firm’s additive manufacturing offering, its current machine portfolio includes the SLS, DLS and MJF technologies, enabling it to address the needs of customers in the consumer goods and medical sectors among others.
In fact, the company recently revealed that it has reached the 20 million 3D printed part milestone, and unveiled some of the more unusual order requests it has fulfilled. Precision pollination firm BeeHero, for instance, now relies on Shapeways 3D printed sensors to optimize hive productivity, while design business 67 Designs additive manufactures durable iPad mounting devices for off-road vehicles.
Shapeways has also worked closely with industry partners over the last two years, to continue broadening its offering to clients. The firm added EOS’ Nylon PA11 to its portfolio in April 2019, before entering into an exclusive materials partnership with Henkel, which saw it begin to offer the company’s Loctite materials via its on-demand 3D printing services.
More recently, Shapeways has integrated ZVerse’s CADaaS platform to optimize the performance of its marketplace, and launched a new 3D printing service alongside BASF subsidiary Forward AM. Following the firm’s proposed merger with Galileo, it now stands to raise a significant amount of capital, which could be used to fund its future growth.
A potential $410 million merger
Although Shapeways hasn’t commented publicly on the proposed merger, it’s understood that the deal will see the firm join with Galileo at a valuation of $410 million, including debt. Given that Galileo went public on the NYSE in October 2020 raising $138 million, it’s likely that this capital will now become available to Shapeways, providing it with a means of funding any plans it has for expansion.
Elsewhere, in recent months, 3D printing firms such as Redwire and Markforged have agreed to undertake similar mergers, which could see them raise up to $310 million via Private Investments in Public Equity (PIPEs). As a result, if Shapeways and Galileo also choose to issue stock to private investors using a PIPE, they could stand to rapidly raise a substantial amount of capital.
As an added bonus, if Shapeways’ IPO can successfully capture investor interest, it holds the potential to raise even more investment, which could help fund its long-term plans. However, Galileo’s shares have remained flat since rumours of a proposed deal began to emerge, suggesting that it’s by no means a given that the IPO will be an immediate stock market success.
The SPAC boom continues
Despite recent changes by U.S. regulators, which have modified the accounting requirements around SPACs, they continue to represent an attractive means of going public for many 3D printing companies. During the first three months of 2021 alone, a record 248 SPAC IPOs took place, with AM firms accounting for nearly $11 billion of these deals.
Desktop Metal seemingly kick-started this trend, by going public via a merger with Trine Acquisition in December 2020, and becoming listed on the NYSE. So far, the agreement has seen the company raise around $580 million in funding, and enabled it to acquire EnvisionTEC for $300 million.
In March 2021, 3D printer manufacturer VELO3D also announced its intention to go public via a merger with Jaws Spitfire Acquisition Corp. The deal, valuing the combined company at some $1.6 billion, is expected to be completed in H2 2021 while raising $500 million in cash proceeds to fund the firm’s future expansion.
UPDATE: Shapeways has now confirmed that it intends to merge with Galileo Acquisition Corp, to create a new enterprise with a total implied equity value of $605 million. Once the deal is completed, the combined company is set to be renamed Shapeways Holdings Inc, and will continue to trade on the NYSE, but under the revised ticker of ‘SHPW.’
While the initial business combination is expected to value Shapeways at $410 million, it will also generate $195 million in net proceeds for the company, giving it total enterprise equity worth $605 million. Of this funding, $75 million is set to be raised via a common stock PIPE, backed by original investors Lux Capital, Andreessen Horowitz, INKEF, and Union Square, as well as Miller Value Partners and XN.
The PIPE will also be supported by Desktop Metal, as part of a strategic partnership between the firms, that should enable Shapeways to expand beyond its focus on plastics, into the lucrative metal market. In terms of the wider cash proceeds generated by its IPO, Shapeways intends to use them to expand on its material and technology offerings, and extend its reach to address clients in new industries.
The boards of both Galileo and Shapeways have already approved the transaction, which will see Greg Kress, Shapeways’ CEO, remain at the helm. Subject to closing conditions, Galileo now has until October 22 2021 to consummate the business combination, but the transaction is expected to close by the summer of 2021.
“Our vision to enable anyone to rapidly transform digital designs into physical products is reaching a significant milestone today as we transition Shapeways into a public company,” said Greg Kress, CEO of Shapeways. “We have been successfully executing on our vision, and this capital will allow us to empower digital manufacturing at scale.”
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Featured image shows a selection of Shapeways 3D printed drone parts. Image via Shapeways.
