Rapid prototyping company Prototek Holdings has purchased Allentown, Pennsylvania-based ProtoCAM Additive Manufacturing. The company will be integrated into Midwest Prototyping, which Prototek acquired last year.
John Pless, Partner at TruArc Partners and a Director of Prototek, said about the acquisition:
“The addition of ProtoCAM is another step toward achieving our ongoing goal of creating a platform able to meet customer demands in an Industrial 4.0 world. Our vision is a one-stop digital manufacturing solution with superior levels of quality and service. ProtoCAM is well suited to further that vision.”
ProtoCAM will add polymer 3D printing capabilities to the Prototek firm, including more SLA and HP’s MJF capacity, as well as FDM. The current ProtoCAM team will be kept in place.
Steve Grundahl, Vice President of Additive Manufacturing, Prototek, stated,
“Ron and his team at ProtoCAM have been longtime friends to Midwest Prototyping and myself. As we set out to create a nationwide network of best-in-class additive manufacturing, ProtoCAM was at the top of our list in the East. We share a remarkably similar culture and customer focus and I can’t imagine a better partner to join us in our effort to build out Prototek’s 3D printing offering.”
Ron Belknap, Founder and CEO of ProtoCAM, said,
“We’ve been successful in steadily growing our business for years, but I knew that to grow the company the way I wanted and to offer my team more career opportunity, I needed a strategic partner. I’ve admired Steve and Midwest Prototyping since first meeting him over 20 years ago. We’re ‘Old Dogs’ in this business and share a passion for additive manufacturing and for our customers, so when Steve reached out to me about joining Prototek with Midwest, I knew it was the right move. I’m excited to see where we go from here.”
ProtoCAM was founded in 1994 and is a strong regional player in 3D printing as well as casting. The company offers urethane and wax casting, as well as SLA casting via 3D Systems´ QuickCast technology. The latter can be used for investment casting, offering a faster turnaround than traditional investment casting patterns.
This acquisition is part of an expected consolidation of the 3D printing and on-demand manufacturing market. When we spoke to Steve Grundahl last year, it was already apparent that Prototek was on the path to more acquisitions. The company has investors behind it and is essentially doing a roll up strategy for 3D printing and CNC services, though the markets for these are very fragmented. Companies are regional or local and tend to have strong local business relationships, but are unable to leverage these to go national or international. Players are also often constrained by their ability to seek financing since they are too old for VCs as businesses, but a little too new for many banks. There is a strong case to be made for a truly national US on-demand manufacturing firm, especially with the focus now more on “made in America,” and the Ukraine war, and a more aggressive China making the case for more, stronger manufacturing in the US. Less supply chain interruptions and more true American manufacturing independence, especially for defence spending, seems like a good bet.
At the same time, the current state of SPACs, the ebb of the deal flow in new SPACs and VC funding, as well as the economic outlook, all give independent operators pause. Expanding fast now, and finding cash now, will be hard, and the companies would have to wait a long time for valuations to increase again. So it seems like a good time to sell up for a lot of people. A national on-demand 3D printing champion will be a strong candidate for a lot of DoD business and could leverage advertising and online clout to become a truly national player. A strong national 3D printing service would also be an almost irresistible morsel for Precision Castparts once they come to their senses. Other manufacturing firms could also be very interested in acquiring a fast moving, growing portion of a diversified manufacturing firm when the time comes to flip Prototek. So this is a future anticipated, and we would expect Prototek to be on the warpath again to outgrow Protolabs and others vying for industry dominance.
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