Essentium HSE 280i HT
Essentium has announced it is set to become a public company via a business combination with Atlantic Coastal Acquisition Corporation.
The transaction is expected to be completed in Q1 of 2022, with the combined company maintaining the Essentium name but listing on the Nasdaq stock market under the ‘ADTV’ ticker symbol. Both Essentium’s and Atlantic Coastal’s Board of Directors have unanimously approved the deal, with Essentium also outlining its intention to expand into metal additive manufacturing after establishing a comprehensive polymer 3D printing portfolio.
That polymer portfolio comprises Essentium’s High Speed Sintering 3D printing platforms, which includes the HSE 240 HT Dual Extruder and HSE 280i HT machines, and a range of polymer materials, including PEEK, PEKK, PPS-CF and more. This offering has attracted the custom of Lockheed Martin, Ford Motor Company and the US Department of Defense, among others, but as it becomes a public company, Essentium is also developing a ‘suite of metal additive systems.’ Its metal offering will be designed to offer ‘unique metallurgies and advanced microstructures for applications with demanding structural integrity.’
Essentium will be looking to add metal additive manufacturing capabilities as it moves forward as a public company. The deal will close subject to approval by Atlantic Coastal’s shareholders, the concurrent PIPE transaction, satisfaction of the conditions states in the definitive agreement and other customary closing conditions. When completed, Essentium will continue to be led by CEO Blake Teipel, COO Lars Uffhausen and Interim CFO Jonathan Bailiff.
Read more: Essentium details quest to enable additive manufacturing at scale at AMUG 2019
“Essentium is transforming the future landscape of supply chains by delivering truly distributed, sustainable manufacturing and operating solutions within all contexts including the ability to operate successfully in contested logistics environments,” commented Blake Teipel, Ph.D., Chief Executive Officer of Essentium. “Fundamental deficits in our existing global supply chain models are being exacerbated by escalating obstacles such as trade imbalances and the global pandemic – all leading to protracted distribution bottlenecks. Today’s announcement represents a major milestone in our efforts to provide long-term, sustainable solutions for a new manufacturing paradigm that can meet these global challenges head-on. Essentium’s solution deploys regional, distributed production capabilities to enable supply chain transparency, and flexible inventory management at a highly competitive TCO, all while reducing waste and supporting a limited carbon footprint through on-site printing.”
“We launched Atlantic Coastal with an ESG-centric focus and a mandate to partner with a company that will transform the nature of international commerce, and we believe that Essentium, with its potential to change the global supply chain, is exactly that partner,” added Shahraab Ahmad, Chairman and Chief Executive Officer of Atlantic Coastal. “Blake and his experienced team have developed a deep technology moat, a product ecosystem validated by the DoD, and a razor/razor-blade model that delivers significant recurring revenue, supporting gross margin expansion and highly attractive unit economics.”
The proposed business combination values the combined company at a $974 million pro forma enterprise value, at a price of $10.00 per share and assuming no redemptions by Atlantic Coastal shareholders, offering an attractive valuation of 4.6x Essentium’s projected 2023E Revenue of $212 million. The proposed transaction is expected to deliver up to $346 million of net proceeds to the Company, assuming no redemptions and net of transaction expenses, including a fully committed common stock PIPE of over $40 million at $10.00 per share led by institutional and strategic investors including BASF, Atalaya and Apeiron. Atlantic Coastal’s management team is also contributing $20 million to the PIPE.
Existing Essentium shareholders will roll over 100% of their equity into the combined company. Following the closing of the transaction, these shareholders are expected to hold approximately 64% of the issued and outstanding shares of common stock.
Essentium is the latest 3D printing company to pursue a public listing, with Desktop Metal, Markforged, VELO3D, Xometry, FATHOM and Fast Radius also going public in the last 12 months.
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