On-demand 3D printing service provider Fathom (NYSE: FATH) began trading on December 27, 2021, on the New York Stock Exchange (NYSE) under the ticker “FATH,” becoming the latest 3D printing business to debut after closing a special purpose acquisition company (SPAC) merger deal. After completing a business combination with blank check firm Altimar Acquisition Corp. II, the Hartland, Wisconsin-based manufacturer is now valued at an estimated $1.5 billion.
As part of the transaction, Fathom raised $345 million in net proceeds, including an $80 million fully committed common stock private investment in public equity (PIPE) anchored by lead investor CORE Industrial Partners. This Chicago-based private equity fund acquired Fathom in 2019, and together with another previously CORE-acquired company called Midwest Composite Technologies, Fathom formed one of the largest privately-held digital manufacturing service providers in North America, with over 600 employees.
Following the NYSE listing, the combined company named Fathom Digital Manufacturing Corp. will accelerate its growth strategy to advance its investment in new innovative technologies, building upon a broad range of advanced manufacturing services. According to Fathom, these investments will enable its customers “access to a differentiated technology-agnostic solution focused on speed, problem-solving, adaptive technical responsiveness and manufacturing expertise,” allowing them to iterate faster and shorten the product development and production cycles.
“We are taking this step because we are a strong, profitable company, and believe our NYSE listing will accelerate Fathom’s growth, both organically and inorganically, by using our stock as a currency to advance our M&A strategy and investing in promising new technologies across the industry,” said Fathom CEO Ryan Martin, who will remain in his leadership role at the company. “These new technologies will enable us to serve our target markets with greater efficiency and responsiveness than ever before. Our broad capabilities from rapid prototyping to low- to mid-volume production, proprietary software suite, engineering expertise, and comprehensive support system are competitive advantages we expect will enable us to continue executing our strategic plan and delivering strong profitable growth.”
Founded in 2008 by Rich Stump and Michelle Mihevc following the purchase of a PolyJet 3D printer, Fathom’s on-demand digital manufacturing platforms today combine a broad array of in-house additive and traditional manufacturing technologies. In addition, the service bureau provides customers with hybridized solutions that uniquely blend additive, subtractive, and formative technologies that push the bounds of product design and development.
With over 25 unique manufacturing processes and a national footprint with nearly 450,000 square feet of manufacturing capacity across 12 facilities, Fathom seamlessly blends in-house capabilities across plastic and metal additive technologies, CNC machining, injection molding, and tooling, sheet metal fabrication, and design and engineering.
Fathom works with blue-chip customers across diverse end markets, including aerospace and defense, transportation, and medical. Focused on providing significant growth opportunities in what it describes as a “fragmented $25 billion low-to-mid volume manufacturing market,” the company has a proven track record with roughly 3,000 blue-chip corporate customers in the last twelve months. In addition, it has secured new business wins with large innovative companies, leveraging its digital manufacturing capabilities customers like Amazon, Google, 3M, Tesla, Philips, and Pfizer.
Even more so, prior to becoming a publicly-traded company, Fathom revealed an accelerating order growth of 24% in the third quarter of 2021, compared to the second quarter of the year. This trend is expected to continue, particularly as the strong demand for additive manufacturing services pursues. According to an SEC filing, in its last reported income statement, the company posted revenue of nearly $108 million for the first nine months of 2021, compared with about $42 million in the same period of 2020. For the full fiscal year 2020, however, Fathom had revealed a strong cash-generating business with $149 million in pro forma revenue.
With the completion of this transaction, Fathom now has a market cap of roughly $900 million and will solidify its position at the forefront of the fast-growing on-demand digital manufacturing sector. CORE founder and managing partner John May points out that Fathom has achieved incredible growth and innovation over the past three years. Upon closing the deal, CORE remains the largest shareholder in the combined business.
The deal adds to a surge of promising public companies going public via SPAC merger deals. In fact, the market listing via the SPAC route has become popular for 3D printing companies. In 2021, Markforged, Velo3D, Shapeways, Rocket Lab, and Redwire Space all went public via SPACs, and we expect to see even more companies following those steps, like Fast Radius. Check out 3DPrint.com’s Stock Zone to keep track of the trading and learn more about the 3D printing market activity at SmarTech and Stifel‘s “AM Strategies 2022” event on March 1-3, 2022.
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