AM Investment Strategies
AMS Spring 2023

Digital Manufacturing Company Fast Radius Goes Public with $1.4B SPAC Agreement

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Another day, another SPAC in the additive manufacturing community! While our Executive Editor Joris Peels had originally wondered if BASF might acquire Fast Radius, the cloud manufacturing and digital supply chain company has entered into a $1.4 billion agreement with special purpose acquisition company ECP Environmental Growth Opportunities Corp. (NASDAQ: ENNV), the result of which is Fast Radius being just the latest in the AM industry to become a publicly listed company.

With an estimated equity value of $1.4B from the contribution of $445 million in gross cash proceeds from the transaction, the combined company will have a post-transaction enterprise value of about $995 million. Proceeds from the deal will equal up to $345 million in cash from ENNV’s trust account, along with another $100 million fully committed private investment, or PIPE, which includes a $25 million forward purchase commitment from Goldman Sachs Asset Management, LP; additional PIPE investors include ECP, Palantir, and Fast Radius partner UPS.

“We are excited to partner with ENNV, as their team’s long track record of success, history of being on the forefront of new sustainable infrastructure transitions, and their institutional reach will accelerate the next chapter of our growth,” said Lou Rassey, Co-Founder and CEO of Fast Radius. “Our board and management team remain committed to executing on our proven business model and driving value for all stakeholders.”

Net proceeds raised from the transaction will support Fast Radius in its ongoing growth strategy—projected to generate revenue and EBITDA of $635 million and $135 million, respectively, in 2025—focused on software development, customer acquisition, and microfactory expansion. Founded in 2017 and headquartered in Chicago, with an onsite production hub in Kentucky and additional offices in Georgia, Louisiana, and Singapore, Fast Radius offers a variety of manufacturing technologies, such as injection molding, CNC machining, urethane casting, and additive manufacturing, like SLA and FDM 3D printing, Carbon’s DLP, and HP’s MultiJet Fusion. As the company serves a more than $350 billion component manufacturing industry, with applications in sporting equipment, automotive, medical, and more, a variety of options is only necessary.

Fast Radius has a fleet of Carbon printers. Image courtesy of Fast Radius.

The closer we get to Industry 4.0, the more cloud manufacturing is quickly gaining momentum—resulting in companies like Fast Radius growing. Technologies like artificial intelligence, digital manufacturing, cloud computing, and IIoT drive cloud manufacturing, which Fast Radius believes is vital to modern manufacturing.

“Industry 4.0 launched the digitization of the manufacturing sector, opening massive opportunities for companies to streamline the processes, tools, and communication they use to bring products to life,” John Nanry, Co-Founder and Chief Manufacturing Officer at Fast Radius, told 3DPrint.com. “With cloud manufacturing, we are able to create a single end-to-end solution that integrates the traditionally separate and opaque processes of design, production, and fulfillment through a common digital infrastructure. This empowers designers, engineers, and manufacturers to make better decisions – about part design, manufacturing methods, materials, order size, and sustainability – while providing superior quality products on tight production timelines. Over the next decade, cloud manufacturing is positioned to have a profound impact on the way we develop, make, and transport physical goods as a driving force for the modernization of the manufacturing industry.”

The company’s Cloud Manufacturing Platform is a new kind of infrastructure that combines proprietary, purpose-built software with a distributed network of company-owned microfactories and third-party suppliers. As Fast Radius CTO Dr. Bill King told us in 2018, the company was named one of the nine best factories in the world by the World Economic Forum that year for its implementation of “technologies of the Fourth Industrial Revolution.”

“Fast Radius brings the future of manufacturing and the supply chain to its clients. Fast Radius’ technology platform and team of engineers help clients unlock value from additive manufacturing across a product’s lifecycle, from entirely new products to global supply chain solutions leveraging a virtual warehouse,” Dr. King continued back then.

The Fast Radius platform is meant to cultivate, as Fast Radius puts it, “an ecosystem of software applications and manufacturing services,” which helps industrial companies move and store parts digitally, and then produce them locally in a more energy-efficient way, which reduces energy, material waste, and transportation. So it makes sense that the SPAC agreement is with ENNV, which works to identify and acquire businesses in North America that combat climate change by decreasing the carbon intensity of energy production, increasing the efficiency of industrial and consumer-related activities, and improving the economy’s overall sustainability.

“The Fast Radius Cloud Manufacturing Platform™ provides a fundamentally more sustainable way to produce and fulfill parts around the world,” stated Doug Kimmelman, Chairman of ENNV. “We look forward to partnering with Lou and his team to accelerate growth as they execute on their proven business model and capitalize on the significant opportunities in the growing custom parts manufacturing market. As a public company, we believe that Fast Radius will be even better positioned to maintain its leadership in the software and industrial technology industry.”

Fast Radius calls itself a software company that manufactures industrial-grade parts at commercial scale, and its Cloud Manufacturing Platform has been used to make over 11 million custom parts for more than 2,000 customers, including Fortune 500 companies in several industries. The platform is made up of the following:

  • Infrastructure: a network of distributed microfactories and third-party suppliers, as well as a software layer to coordinate everything
  • Operating System: a software-driven, modern user experience for international operations and customers
  • Apps & Services: offering access to manufacturing knowledge, tools, elastic capacity, and services, like Fast Radius On-Demand, to anyone with a browser

The platform is meant to create a more accessible, flexible, and sustainable global supply chain paradigm—rather than physically storing parts, companies can digitally store them in the Fast Radius Virtual Warehouse, and then have them produced locally in one of the company’s certified microfactories; Fast Radius partnered with UPS to support the expansion of its digital manufacturing infrastructure. Fast Radius has big plans to create the first $100+ billion cloud manufacturing and digital supply chain company, making it a pretty inviting Industry 4.0 investment opportunity.

“We are building a first-of-its-kind Cloud Manufacturing Platform that is providing a new infrastructure to design, make and move physical things in the digital age,” Rassey said. “As the Platform expands, we believe cloud manufacturing will have as great an impact on driving innovation in the physical world as cloud computing has had in the digital world. The benefits from the software and hardware powering cloud manufacturing are tangible and significant – the cloud brings improved speed, flexibility, cost, and accessibility to industry 4.0, all while providing a more sustainable model for global supply chains.”

With this new SPAC agreement, current Fast Radius employees, management, and shareholders will now roll 100% of their existing holdings into equity of the combined company. The boards of directors at both Fast Radius and ENNV unequivocally approve of this business combination, which is expected to close in Q4 of this year, subject to customary closing conditions and regulatory/stockholder approvals. Once the transaction is officially closed, ENNV, which will likely remain listed on the NASDAQ, will be renamed as Fast Radius, Inc.

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