It’s no secret that the business environment in the last few years has made mergers and acquisitions (M&As) tricky, a theme that has been rather visibly on display in the additive manufacturing (AM) sector throughout 2023. On the other hand, M&A activity has by no means come to a halt, and the latest evidence of this is Nexa3D’s acquisition of Essentium, announced today ahead of Formnext 2023 (November 7-10 in Frankfurt, Germany).
Based in Ventura, California, Nexa3D specializes in high-throughput stereolithography (SLA) and polymer powder bed fusion (PBF) platforms, making Essentium, with its signature High Speed Extrusion (HSE) technology, an ideal addition to the Nexa3D portfolio. The CEO of Nexa3D, Avi Reichental, and the CEO of Essentium, Blake Teipel, told me that the synergy between the two brands made the deal too compelling to ignore:
Reichental followed up on that by pointing out that the rationale for a merger should be based on compelling reasons to do so, rather than on fear of what could happen in lieu of a deal:
Essentium is no stranger to the financial rockiness unleashed by the combination of the highest interest rates in decades and the onset of a bear market. In February 2022, right as US equities markets were starting their downward shift, Atlantic Coastal Acquisition Corp. backed out of a SPAC deal with Essentium that would have taken the company public. As a result, Essentium lost out on another deal that was in the works: the acquisition of 3D printing startup Collider.
In retrospect, given the track record of SPACs in the last couple of years especially, these developments look to have been a blessing in disguise. Instead of having to focus on a transition to being a publicly-traded company while simultaneously navigating the complications of bringing a new entity into its fold, Essentium has harnessed its focus and honed in on landing deals based on high-value applications like transportation and IoT. Essentium has also bolstered its credentials as a partner to the US military, participating in the US Navy’s 2022 REPTX exercises and providing its HSE platform to the Maine Air National Guard.
Reichental specifically highlighted Essentium’s government contracting experience as one of the key factors that made the company an attractive buy:
That synergistic combination is perhaps most strikingly apparent in the fact that Essentium specializes in extrusion, the missing link in Nexa’s portfolio. From the reverse perspective, all of the processes that are Nexa3D competencies allow Essentium to diversify the ways in which it can serve its impressive customer base:
As they’re closing out this year on such a strong note, it is unsurprising that Reichental and Teipel are both optimistic about the AM sector’s potential in 2024:
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