Five months after Nexa3D acquired Essentium, the integration process is well underway. Despite initial perceptions that Nexa3D might be sidelining Essentium and founder Blake Teipel, the reality is more strategic. Essentium’s Texas offices are set to close in the summer, with operations being consolidated at Nexa3D’s Ventura, California site. While Teipel will not have a formal position at the company, the relationship between him and Avi Reichental, CEO of Nexa3D, remains positive and cooperative, ensuring a smooth transition.
3DPrint.com spoke with both Reichental and Teipel, noting a collaborative relationship that extends beyond mere friendship. Both leaders hope to work together again in the future. For now, Blake will watch from the sidelines, but the duo continues to tweak the integration process and will be present together at RAPID + TCT 2024.
Navigating Industry Challenges
The 3D printing industry is no stranger to economic ups and downs, but the current downturn surpasses even the 2008-2009 recession in its prolonged impact.
Reichental notes, “Our entire industry is going through a rough patch, but thankfully, we are on the revenue side continuing to grow and outpace what the industry is doing. Nexa3D is weathering the storm like everyone else, but we have remained solid thanks to a robust portfolio and strong channel partnerships.”
Avi Reichental, CEO of Nexa3D, at the AMS 2024 event. Image courtesy of 3DPrint.com.
However, the overall economic climate remains a hurdle, with elongated selling cycles and cautious customer spending. Reichental remains positive, claiming it’s easier to grow a smaller business than growing businesses with hundreds of millions of dollars and much more exposure.
In an industry already experiencing some turbulence, the acquisition of Essentium by Nexa3D marks a strategic consolidation designed to navigate the rough seas. Contrary to the tumultuous acquisitions often seen, this transition shows careful planning.
Essentium was officially acquired by Nexa3D on January 12, 2024, following a signing in December 2023. Cost efficiencies drove the decision to consolidate operations under one roof in Ventura, California, rather than the site of Essentium headquarters in Austin, Texas.
Teipel highlights that “Ventura, California, is surprisingly affordable in terms of a place to operate a business; it’s more affordable than Austin, Texas. So we are consolidating operations under one roof, which was always a strategy.”
Essentium co-founder and CEO Blake Teipel. Image courtesy of Essentium.
The decision to consolidate was influenced by several factors, including the underutilization of Essentium’s Pflugerville facility, which had significant unused space due to previous workforce reductions and remote work arrangements.
By bringing together manufacturing and design teams under one roof, Nexa3D is moving towards greater efficiency and innovation. Teipel says this is the best practice for any manufacturing organization. This consolidation, set to be completed this summer, also includes some downsizing due to economic pressures and restructuring efforts.
The move also includes insourcing the production of Essentium’s extrusion machines, which were previously outsourced to China. Reichental explains, “We want to begin to produce those machines here in Ventura. The plan was always to, once we deplete the inventory of the extrusion lines, begin to assemble those here as well. We have already done this with the QLS 260 SLS 3D printers after acquiring XYZ Printing‘s SLS business. Those machines were previously made in Thailand, but in the last few weeks, we started shipping the first U.S.-made inventory.
The machines Essentium brings to Nexa3D, such as high-speed extrusion equipment and materials, will enhance Nexa3D’s product lineup.
Leadership and Future Plans
While Teipel is stepping down from his role as Chief Strategy Officer (CSO) at Nexa3D, a position he has held since January 2024, he remains a supportive figure for the business. He plans to take some time to contemplate his next steps but will continue to cheer for the company.
“I’m always going be a fan of Nexa3D and Essentium. Avi and I are handling this like adults, doing what’s best for the business, and right now, we don’t need two CEOs and an executive team. Right now, the business needs to be lean, agile, dug in, and entrenched to focus on its core, execute with excellence, and accelerate.” Teipel states.
Teipel’s extensive background includes working with veterans, developing prosthetic parts, and engineering positions at NASA and in heavy machinery companies John Deere and Caterpillar. With contributions impacting many sectors, it’s difficult to imagine Teipel staying away from engineering or 3D printing for long.
Similarly, Reichental remarked: “We’re really good friends, and we lean into what needs to be done and problem-solve together.”
Essentium’s HSE machine in action. Image courtesy of Nexa3D.
In an industry often tainted by negative stories of acquisitions, the Nexa3D-Essentium transition stands out as a positive example. Both leaders emphasize the importance of intentionality and heart in business decisions.
Teipel reflects, “It is bittersweet to make decisions like this, but doing it with heart in mind and intentionality is what we want to convey. Most stories about acquisitions are ugly, but this one shows that it doesn’t have to be that way.”
According to Reichental and Teipel, the transition of Essentium’s operations to Nexa3D’s California site is not just about closing offices and reducing staff but strategic consolidation and innovation. The executives are aligned in their vision to bring together teams and efforts to create a more impactful and efficient operation. While this move might be challenging for Essentium’s employees, Reichental emphasizes that it will lead to the reshoring of machine production and a stronger, more integrated company.