Desktop Metal to acquire EnvisionTEC for $300M

Desktop Metal signed a definitive agreement to acquire EnvisionTEC, a leading global provider of volume production photopolymer 3D printing solutions for end-use parts, for a total consideration of $300 million, consisting of a combination of cash and newly issued Desktop Metal stock. The transaction is expected to close in the first quarter of 2021, subject to customary closing conditions. Following the completion of the acquisition, EnvisionTEC will operate as a wholly-owned subsidiary of Desktop Metal. EnvisionTEC founder Al Siblani will continue to serve as Chief Executive Officer of the EnvisionTEC business.

The deal is particularly significant as the two companies represent diametrically opposite approaches to the AM market. Desktop Metal is part of the “new wave of AM companies” looking to broaden adoption and industrialize the technology for digital mass production. EnvisionTEC on the other hand is one of the most “traditional” AM companies and a leader in advanced DLP photopolymerization for a very high-level target audience.

Also, considering that Desktop Metal recently entered the stock market through an acquisition operation, this operation can also be seen as a way for EnvisionTEC—which generates more than 20 times more sales revenue than Desktop Metal today—to be present in the stock market and for investors to bet on it. Something that many potential investors probably appreciate, considering the very solid technological foundations upon which EnvisionTEC has been built. With the NYSE still to open today, Desktop Metal is trading nearly 100% higher since the company was first listed.

“I’m thrilled to partner with Al and the EnvisionTEC team to bring significant growth to the additive market,” said Ric Fulop, Founder and Chief Executive Officer of Desktop Metal. “EnvisionTEC is a true pioneer and responsible for many of the leading technologies widely used today to produce end-use photopolymer parts through additive manufacturing. Together, Desktop Metal and EnvisionTEC have an opportunity to shape the future of Additive Manufacturing 2.0 and transform how parts are made around the world. I look forward to welcoming EnvisionTEC to the Desktop Metal team to deliver world-class additive manufacturing solutions that help make our customers successful.”

Of course, EnvisionTEC and its potential investors are not the only ones to benefit from this deal, which is as powerful as it is unexpected. In just one shot Desktop Metal doubled its global distribution network and is now able to reach 68 countries. This will prove particularly useful as the company looks to market its latest Production system for metal binder jetting into new markets worldwide.

“I am excited and honored to partner with Ric and the Desktop Metal team to deliver end-use parts in both metal and polymers as we implement Ric’s vision on the future of Additive Manufacturing 2.0,” said Siblani. “Bringing the two companies together will deliver a global footprint of customers that can cross-benefit from our combined technology platforms. I believe we have many opportunities to scale the business, disrupt traditional manufacturing, expand our customer base, and create value for our shareholders.”

Category leader with a history of innovation

As the original inventor of digital light processing (DLP) 3D printing technology, EnvisionTEC has one of the strongest intellectual property portfolios in the area-wide photopolymer 3D printing market, counting over 140 issued and pending patents, which Desktop Metal believes includes blocking intellectual property.

Today, EnvisionTEC has over 5,000 customers across a broad range of industries, including medical devices, jewelry, automotive, aerospace, and biofabrication. In addition, the company is a leader in the dental market, more than tripling the number of Envision One dental shipments from 2019 to 2020 and with over 1,000 dental customers now using its printers for end-use parts. Key customers include Cartier, Celgene, Ford, Hasbro, Oral Arts, Stuller, and Smile Direct Club.

In addition to extensive customer adoption, EnvisionTEC has a broad library of over 190 materials, featuring photopolymer resins with material properties in-line with or exceeding those of thermoplastics and multiple FDA-listed and 510(K)-cleared resins for the manufacturing of medical devices. The company augments its robust proprietary material development efforts with a selectively open business model, leveraging relationships with major chemical companies such as Henkel Loctite, DSM Somos, Detax, Keystone, and Arkema to sell third-party, industry-validated resins for use with its additive manufacturing platforms.

Unifying metals, composites, and polymers

EnvisionTEC brings a compelling product portfolio for producing photopolymers under Desktop Metal’s umbrella, including the new Envision One and Xtreme 8K printing platforms designed for cost-effective volume production. The Xtreme 8K platform, which is expected to begin commercial shipments in the first quarter of 2021, features the largest build area among production-grade DLP printers. The Xtreme 8K leverages patented projection array technology and is capable of delivering build speeds up to 100 times those of legacy thermoplastic 3D printers and at a fraction of the hardware price of comparable solutions. The Envision One platform, which includes models for dental, medical, and industrial segments and for high-temperature resins, leverages patented continuous digital light manufacturing (cDLM) and domeless basement technologies to deliver high-speed, end-use parts production with exceptional accuracy.

EnvisionTEC is also a pioneer in digital biofabrication additive manufacturing with its Bioplotter platform, which supports the production of biocompatible parts for medical applications such as bone regeneration, cartilage regeneration, soft tissue fabrication, drug release, and organ printing.

Scaling distribution into new verticals

The acquisition more than doubles Desktop Metal’s global distribution network and increases its geographic sales capabilities to 68 countries around the world. EnvisionTEC adds a robust set of vertically-focused partners in the dental and jewelry markets, which Desktop Metal plans to leverage to sell its metal additive manufacturing solutions. In addition, Desktop Metal’s horizontally-focused channel partners will provide an outlet for distributing EnvisionTEC products and scaling its sales, particularly in industrial, education, and R&D segments.

Through this acquisition, Desktop Metal will gain digital casting capabilities via EnvisionTEC’s industrial-scale robotic additive manufacturing (RAM) product platform. EnvisionTEC’s RAM systems, which are available for as little as one-fourth of the price of slower legacy alternatives, use patented technology to produce mold cores and investment casting patterns for foundry applications using either Polymethyl Methacrylate (PMMA) or silica sand. Desktop Metal plans to significantly advance the performance of this platform with the proprietary and patent-pending Single Pass JettingTM technology originally developed for its Production System to drive productivity enhancements and improve part economics across builds as large as 1.8 x 0.9 x. 0.9 meters.

Disclaimer: the author of this article owns Desktop Metal stocks and this article is intended for informational purposes only.