With Increased Aerospace & Defense Focus, CORE Industrial Partners Buys More Manufacturing Firms

Private equity’s march into manufacturing continues with CORE Industrial Partners’ latest acquisitions. CORE purchased Fathom a few years ago, and later bought 3DXTECH LLC, Triton 3D LLC, and Gearbox3D. It also acquired Phoenix Proto Technologies, which was added to the RE3DTECH+GoProto part of its business. CORE’s Fathom subsidiary currently consists of 16 companies. CORE also owns Prototek, PrecisionX Group, and Uptive (which combined a bunch of stuff).

Now, FATHOM is focusing on aerospace and defense. It has purchased three new manufacturing businesses: Rochester, New York-based TCS Industries and TCS Electronics, and Precision Grinding & Manufacturing Corporation (PGM), also in Rochester.

CORE Partner Matthew Puglisi said,

“The aerospace and defense industry is entering a period of significant investment in domestic manufacturing capacity, and suppliers that can combine technical expertise, quality and reliable execution will play an increasingly important role. We believe TCS and PGM are outstanding businesses with strong customer relationships and capabilities that complement Fathom’s existing platform. These acquisitions position Fathom to pursue larger opportunities across aerospace and defense while continuing to invest in the people, technology and manufacturing capabilities needed to support long-term growth.”

Fathom now has 10 locations and over 700 staff, and offers 3D printing, CNC, injection molding, and more. Both TCS and PGM together have plenty of experience in aerospace and defense, as well as “longstanding customer relationships and complementary capabilities spanning precision machining, electronics manufacturing, complex assemblies and specialized finishing.”

According to TCS President Manoj Shekar,

“For nearly 35 years, we’ve built TCS around the trust of our customers and the expertise of our employees. Joining Fathom gives us the resources and broader capabilities to build on that success while maintaining the customer focus and operating discipline that have defined our business. We’re excited about the opportunities ahead for our employees and customers.”

Todd Hockenberger, Corporate VP of TGM, said,

“Our family has spent nearly six decades building a business known for precision, reliability and customer service. Fathom shares those values and brings the resources and broader capabilities to help us take the next step. We look forward to investing in our people, expanding our capabilities and supporting the next generation of aerospace and defense programs.”

Fathom says its strategy is “to build a leading U.S. precision manufacturing platform at a time when aerospace and defense companies are seeking to strengthen domestic supply chains, augment production capacity and bring increasingly complex technologies to market. By combining advanced manufacturing, electronics integration and specialized production capabilities, Fathom is better positioned to support customers from early-stage development and prototyping through qualified, sustained production.”

Fathom’s CEO Rush LaSelle said,

“The challenge for aerospace and defense manufacturers isn’t just developing new technologies. It’s having the manufacturing expertise and capacity to produce them reliably and at scale. TCS and PGM bring exceptional technical talent, proven capabilities and deep customer relationships that make our platform stronger. Together, we can support more complex programs, provide customers with a broader range of solutions and help them navigate the increasing demands of aerospace and defense manufacturing.”

Whereas most platform strategies are kind of daft, or worse still, goals masquerading as strategies, this seems like a very sound play. It extends on the back of CORE’s work in 3D printing since it began investing in the technology in 2018. Right now, with a missile deficit and a declining industrial base – not a great combination. At the same time, the US is moving from the exquisite few perfect aircraft to trying to make tens of thousands of good enough expendable vehicles. This entails a lot of opportunities for companies flexible enough to meet the new paradigm. In terms of speed, cost structure, and flexibility, the watch manufacturing of old may not meet new more fast moving goods.

CORE is again on the march, and slowly but surely, a large footprint company is emerging that uses many different technologies. Through adding technologies such as CNC machining and electronics assembly with its latest acquisitions, it further expands what it can do. The firm is going from offering lots of different processes to being able to make parts, assemblies, and devices. That positions it as a mature, scalable partner for manufacturing. CORE Industrial Partners seems to be doing well in its build out of US manufacturing.

Images courtesy of TCS