Breaking: Protolabs to acquire 3D Hubs for $280 million
The deal creates world’s broadest digital manufacturing offer for custom parts
Protolabs has entered into a definitive agreement to acquire 3D Hubs, a leading online manufacturing platform that provides engineers with on-demand access to a global network of approximately 240 premium manufacturing partners. The transaction creates the world’s most comprehensive digital manufacturing offer for custom parts, providing Protolabs with a network of manufacturing partners to fulfill a breadth of capabilities outside of its current envelope, as well as a broader offering of pricing and lead time options.
“The addition of 3D Hubs provides Protolabs a platform to evolve our service model to provide unprecedented manufacturing flexibility to our customers,” said Rob Bodor, Protolabs’ current VP and GM of the Americas and incoming President and Chief Executive Officer. “Our combined organizations will provide the market an industry-leading digital manufacturing solution to serve their needs from idea to prototype to full end-use part production. Together we can fulfill nearly every custom manufacturing need across the product life cycle.”
Bram de Zwart and Brian Garret founded 3D Hubs in 2013. What was just the seed of an idea has since grown into a major global manufacturing platform, that facilitated the production of over 6 million custom parts and products through its digital platform.
3D Hubs provides customers with instant pricing and design feedback, and orders are fulfilled through thoroughly vetted premium manufacturing partners in over 20 countries worldwide, offering vast manufacturing capacity and a broad range of manufacturing capabilities at a variety of competitive pricing levels.
I had the opportunity to interview Mr. De Zwart in 2014, at the beginning of this adventure at the company’s HQ in Amsterdam. He explained the company’s long term goal was to create an “Airbnb-type” platform for manufacturing. At the time it seemed a remote possibility that has become more and more realistic over time. It is surprising how the ongoing pandemic could shake the foundations upon which Airbnb has been built and, at the same time, accelerate the evolution of 3D Hubs’ distributed manufacturing approach.
“The entire 3D Hubs team is thrilled to join Protolabs and continue to revolutionize the manufacturing industry through innovation. At 3D Hubs, our goal is to empower companies to create revolutionary products through supply chain efficiency and reliability. We are confident that partnering with Protolabs will help us advance that mission,” said Bram de Zwart, Co-Founder and Chief Executive Officer at 3D Hubs.
“3D Hubs’ company culture lives and breathes engineering and fast-paced innovation; our team is very excited to partner with Protolabs to build the best on-demand manufacturing solution imaginable,” added Brian Garret, 3D Hubs’ Co-Founder and Chief Product Officer.
Under the terms of the agreement, closing consideration of $280 million will be funded with $130 million in cash and $150 million in Protolabs common stock. An additional $50 million of contingent consideration is payable subject to performance-based targets over two years after close, funded with 50% cash and 50% Protolabs common stock. Protolabs has also established an employee incentive fund payable to 3D Hubs employees based on achievement of both financial performance and employee retention targets.
Another element that emerges is the key role of Ric Fulop in accelerating this new phase of expansion and consolidation of the additive manufacturing industry. Fulop’s Desktop Metal just acquired industry pioneer EnvisionTEC. As a General Partner at North Bridge, Fulop also had a key role as an investor in the establishment of Proto Labs, one of the fastest-growing companies in the AM world today.
Protolabs now anticipates the acquisition of 3D Hubs will accelerate its revenue growth rate and be marginally dilutive to non-GAAP earnings per share in 2021. 3D Hubs’ 2020 revenue is estimated to be $25 million and the company’s revenue has had a compound annual growth rate of over 200% since 2017. The transaction is expected to close by the end of January, subject to customary closing conditions.
“The acquisition of 3D Hubs is part of the continued evolution of Protolabs as the digital manufacturing leader, serving more and more of our customers’ needs,” said Vicki Holt, Protolabs’ Chief Executive Officer. “Protolabs’ leading in-house technology-enabled manufacturing services combined with 3D Hubs’ global network of premium manufacturing partners will yield the greatest value to our customers for years to come.”