As the 3D printing market heats up, we are sure to see several key mergers and acquisitions within the space. Consolidation is a natural occurance within any growing industry, and that’s certainly what we have begun seeing in the 3D printing industry.
On Wednesday, Proto Labs (NYSE:PRLB), a NYSE traded company with a market capital of over $1.5 billion, closed on an acquisition of North Carolina based FineLine Prototyping Inc. The value of the deal was $37 million.
FineLine is a major prototyping force, which relies heavily on additive manufacturing. They use direct metal laser sintering, stereolithography, and selective laser sintering to produce prototypes for manufacturers around the world. They employ 85 individuals, and last year generated approximately $9.7 million in revenue.
Proto Labs, on the other hand, is a firm specializing in prototyping, but mainly with subtractive manufacturing techniques. In the past, the company stated that they had no intention of investing in 3D printing; however this has clearly changed. The acquisition makes a tremendous amount of sense from a business standpoint. Currently about 70% of Proto Labs’ customers also rely on prototyping via 3D printing. The acquisition is a natural move by the company, allowing them to cater to a larger portion of their customers’ prototyping needs.
“Our strategy has been to add services needed by our customer base, the product developer. Additive manufacturing allows us to address a broader range of need for a product developer by providing concept models at the early stage of product development. The addition of additive manufacturing expands our current service offerings in a very complimentary way,” stated Bill Dietrick, spokesman for Proto Labs.
The company plans to use FineLine’s North Carolina facility as its additive manufacturing hub, operating under the Proto Labs name, but they plan to keep the Fineline moniker as the brand name for its 3D printing services.
“The acquisition of FineLine is consistent with Proto Labs’ strategy to expand sales to product developers through envelope expansions and addition of new service offerings which reduce time, cost and waste in new product development,” Proto Labs President and CEO Vicki Holt said in a statement.
Rapid prototying via the latest additive and subtractive manufacturing technology is becoming a major business, as manufacturers look to get products to market faster, and at a cheaper rate. Prototyping is one of the most time consuming, as well and money consuming processes within a production cycle. Proto Labs is certainly setting themselves up to be a powerhouse within the industry. They are also expanding their facility in Plymouth, Minnesota to meet demand. The new facility opens next week and will add 166,000 square feet of floor space to their production capacity. Discuss this acquisition at 3DPB.com.