CORE Industrial Partners is a private equity firm in Chicago, made up of experienced investment professionals and former CEOs, with $700 million worth of capital commitments investing in lower middle-market manufacturing, industrial technology, and services businesses in North America. For the last few years, the company has been looking closer at the additive manufacturing (AM) industry, and acquiring AM businesses, such as 3D printing provider Fathom, as new portfolio businesses. Then, some of these portfolio companies go on and purchase other firms, like FATHOM did with injection molding firm Summit and metal AM service provider GPI Prototype & Manufacturing Services LLC.
In November, CORE announced the acquisition of three more 3D printing companies—3D printing filament provider 3DXTECH, Triton 3D, which provides accessories and Stratasys-compatible AM materials, and open-source industrial 3D printer provider Gearbox3D—allowing the firm to form a brand new additive manufacturing platform. 3DPrint.com spoke with John May, the Founder and Managing Partner of CORE, to learn more about the company’s long-term strategy in the AM market. He told us that CORE, having “identified the additive manufacturing sector as a thematic vertical of interest,” has made close to 20 acquisitions so far, “many of which have been integrated into the Fathom platform.”
3DPrint.com: Why did you specifically choose to acquire Fathom, 3DXTECH, Triton, and Gearbox3D?
“Fathom was an attractive investment due to their broad range of manufacturing capabilities from rapid prototyping to low- to mid-volume production, a proprietary software suite, and engineering expertise. And it was one of the early entrants in the 3D printing industry, dating back to over 30 years of experience.
“3DXTECH, Triton and Gearbox3D were acquired to form a separate platform, representing an expansion of our investment thesis in the additive manufacturing market, albeit with a focus on equipment and materials (vs. manufacturing services at Fathom).”
May further explained that the recent investments in 3DXTECH, Triton, and Gearbox3D aligned with CORE’s strategy to build an equipment- and proprietary materials-based additive manufacturing platform.
“We identified this platform as an attractive entry point due to its successful marriage of deep materials expertise with a differentiated 3D printer offering.”
What’s CORE’s goal with these acquisitions?
“Our goal is to drive transformational growth through both organic initiatives and complementary add-on acquisitions to create market leading businesses capable of accelerating new product development and optimizing product design solutions for our customers.”
Is the company doing a roll-up strategy for 3D printing?
“Yes. Fathom has completed 13 acquisitions over the last three years providing increased scale and capacity, complementary manufacturing capabilities and diversification across industry-leading customers and end markets.
“3DXTECH, Triton and Gearbox3D will similarly, albeit separately from Fathom, look to complete highly strategic add-on acquisitions to augment the commercial and operational capabilities of the broader platform.”
When asked what types of companies CORE is looking to acquire, May answered that its two AM platforms search for targets with “complementary manufacturing capabilities, technology / software, customers, end markets and geographic footprint.”
“Fathom is focused on the rapid prototyping and mid-to-low- volume manufacturing industry while 3DXTECH, Triton and Gearbox3D will look to acquire additive manufacturing materials and equipment manufacturers.”
May explained that the four AM firms it’s acquired in the last few years will not all be integrated together, with Fathom acting as a separate platform than 3DXTECH, Triton, and Gearbox3D; however, these latter three have been incorporated into a single business.
Where do you hope to create value?
“We hope to create value for our customers, employees, communities, and stakeholders by building market leading businesses with compelling product and service offerings.
“Fathom has experienced transformational growth through a combination of strategic initiatives and complementary acquisitions resulting in one of the largest on-demand digital manufacturing companies in North America with over 90 large-platform additive manufacturing machines and 450k square feet of manufacturing capacity across 12 facilities.”
May explained that CORE hopes “achieve a similar result for 3DXTECH, Triton and Gearbox3D.”
Do you want to remain independent, or is the goal to sell this business?
“Fathom has announced a business combination with with Altimar Acquisition Corp. II and will become a public company listed on the NYSE under the ticker “FATH”.
“3DXTECH is a more recent investment that will operate under our ownership as we execute on our identified strategic growth plan in the near term.”
Our Additive Manufacturing Strategies conference, produced together with SmarTech Analysis, is coming up in March of 2022, with 3D Systems as a Diamond Sponsor and Stifel as a Presenting Sponsor. The hybrid event, held both online and in-person in New York City, will feature a total of nine vertical AM topics, including industrial metal 3D printing, automation, new materials, software, 3D printing for the healthcare, dentistry, automotive, aviation, and space industries, bioprinting, and rapid manufacturing.
We wanted to know what May had to say about these vertical topics, and how they aligned with CORE’s additive manufacturing investment focus.
“Each of the above topics aligns with our investment focus in the additive manufacturing sector as we are constantly working to provide the most innovative solutions to our broad base of blue-chip customers.
“We provide rapid manufacturing services to the world’s leading companies across a wide variety of end markets, including healthcare, technology, automotive, aviation and space, among others.”
In the last month alone, CORE portfolio company CGI Automated Manufacturing, which itself was acquired by CORE in August, announced the acquisition of Precision Metal Fab and Precision Tool & Die, which provides metal cutting and forming solutions, and the acquisition of HealthSpecialty, a full-service contract manufacturer of skin, body, and hair care products, by CORE portfolio company Arizona Natural Resources (ANR). So it doesn’t appear that the firm is slowing down anytime soon. It will be interesting to see which 3D printing company CORE invests in next.
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