Desktop Metal has announced it is to become a publicly listed company after agreeing to a reverse merger with special purpose acquisition company (SPAC) Trine Acquisition Corp and global credit investment firm HPS Investment Partners.
The Boston-based 3D printing vendor says it has made the move to ‘accelerate its growth trajectory’ and ‘capitalise on strong secular tailwinds supporting the reshoring of manufacturing and supply chain flexibility.’ As a result of the transaction, Desktop Metal also intends to accelerate its growth and product development efforts, as well as use the proceeds to supports ‘constructive consolidation in the additive manufacturing industry.’ It will be listed on the New York Stock Exchange and trade under the ticker symbol ‘DM’, while Trine (NYSE:TRNE) CEO Leo Hindery, Jr. will also join the Desktop Metal board.
Desktop Metal launched to market in 2017, unveiling its Studio and Production metal additive manufacturing platforms, with its Shop metal binder jet system and Fiber composite platform following in 2019. Since it was founded in 2015, the company has raised more than $400m in venture capital funding, procuring investment from the likes of BMW, Koch Industries, GE Ventures, Ford and Stratasys, and has become one of three 3D printing unicorns with a value above $1 billion.
Per a press release distributed by Desktop Metal, all significant shareholders will retain their equity holdings through Desktop Metal’s transition into a publicly listed company. The deal, which is set to close in Q4 of 2020 and increase Desktop Metal's value up to $2.5 billion, has been unanimously approved by the boards of directors of both Desktop Metal and Trine. It makes Desktop Metal the most valuable additive manufacturing company, edging ahead of Carbon at an estimated $2.4b.
“We are at a major inflection point in the adoption of additive manufacturing, and Desktop Metal is leading the way in this transformation,” said Co-founder, Chairman & Chief Executive Officer of Desktop Metal, Ric Fulop. “Our solutions are designed for both massive throughput and ease of use, enabling organisations of all sizes to make parts faster, more cost effectively, and with higher levels of complexity and sustainability than ever before. We are energised to make our debut as a publicly traded company and begin our partnership with Trine, which will provide the resources to accelerate our go-to-market efforts and enhance our relentless efforts in R&D.”
Leo Hindery, Jr., Chairman & Chief Executive Officer of TRNE added: “After evaluating more than 100 companies, we identified Desktop Metal as the most unique and compelling opportunity, a company that we believe is primed to be the leader in a rapidly growing industry thanks to their substantial technology moat, deep customer relationships across diverse end markets, and impressive, recurring unit economics. Ric has put together an exceptional team and board of directors with whom we are excited to partner to create the only publicly traded pure-play Additive Manufacturing 2.0 company."
In accordance with the transaction, Trine will combine with Desktop Metal at an estimated $2.5 billion pro forma equity value. Assuming no redemptions by TRNE’s existing public stockholders, Desktop Metal’s existing shareholders hold approximately 74% of the issued and outstanding shares of common stock immediately following the closing of the business combination.
Cash proceeds in connection with the transaction will be funded through a combination of TRNE’s cash in trust and a $275 million fully committed common stock PIPE at $10.00 per share, including investments from funds and affiliates of Miller Value Partners, XN, Baron Capital Group, Chamath Palihapitiya, JB Straubel, and HPS Investment Partners.
