3D printing and plastics company Fathom wins a $ 1.5 billion SPAC deal to go public
A Wisconsin-based rapid manufacturing specialist with 3D printing, tooling, and injection molding equipment is going public on a $ 420 million deal that valued the company at $ 1.5 billion.
Altimar Acquisition Corp. II based in New York and Fathom Digital Manufacturing Corp. based in Hartland, Wisconsin, announced on July 16 that they were merging and plan to list the new company later this year.
The companies highlight their advanced manufacturing capabilities, including their digital manufacturing expertise.
“We believe Fathom is a growing, cash-generating, well-managed disruptor in Industry 4.0 that will deliver strong results,” said Tom Wasserman, Chairman and CEO of Altimar, in a call on July 16, describing to investors what he sees as “the next wave” of the industrial revolution. “
While 3D printing is drawing the most attention, merger is also a big deal in tool making and injection molding.
In February, Fathom acquired Summit Tooling Inc. and Summit Plastics Inc. of McHenry, Illinois. In late 2019, it bought ICOMold LLC, a custom injection moulder based in Holland, Ohio.
After the IPO, the company plans further acquisitions, Wasserman said, as part of a strategy to do business in the low to medium volume manufacturing market.
Altimar, a Special Purpose Acquisition Company (SPAC) eyed numerous partners, but Fathom had 35 years of experience in on-demand digital manufacturing, 3D manufacturing, and advanced traditional manufacturing such as machining, sheet metal fabrication, and injection molding, Wasserman said.
Fathom has more than 90 large-platform additive manufacturing machines and offers eight different 3D printing services as well as about 20 other manufacturing processes in 12 locations with a production capacity of nearly 450,000 square meters.
The company serves 3,000 mostly blue-chip customers in a number of industries including aerospace, automotive, electric vehicles, consumer products, industrial, medical and technology.
Recent industry advances in software, hardware and machinery have created a $ 25 billion small and medium-volume manufacturing market that the merged companies will pursue, Wasserman said.
Altimar will fund the transaction with a combination of $ 345 million in cash and $ 80 million in promised common stock offered through private investment in public equity (PIPE) at $ 10 per share.
According to Ryan Martin, CEO of Fathom, the deal is set to accelerate the growth of Fathom, which had sales of $ 149 million in 2020 and is expected to reach $ 200 million in 2022.
“We have made 13 acquisitions in the past three years and have a strong track record of integrating and growing the businesses we have acquired,” Martin said on the conference call. “We are seeing a target audience to expand the Fathom platform and we will be able to better execute our pipeline once we can leverage our equity and acquisition currency with the current location line for dozens of potential opportunities.”
Fathom is ready for the public market, added Martin.
“As early adopters of additive and advanced traditional manufacturing, we know that our capabilities fill a clear gap in the market for outsourced digital manufacturing solutions that are tailored to the complex needs of enterprise customers,” he said.
Fathom is doing a lot of business through product development projects that Martin calls “a trademark of Industry 4.0”.
“We are giving our customers access to this technology and helping them to run their development pipelines more efficiently, get products to market faster and give them a differentiated advantage over their competition,” said Martin.
Fathom offers three tool options: rapid tooling for up to 5,000 parts in 1½ to 3 weeks, prototype tools for up to 50,000 parts in 2-4 weeks and production tools for up to 1 million parts in 5-10 weeks.
For manufacturing, Fathom has 12 manufacturing centers to help customers with onshore operations from overseas to North America. Summit Tooling in McHenry has 15 injection molding presses with a clamping force of 40 to 350 tons. ICOMold offers molds in the US and China.
Fathom’s agility helps customers overcome supply chain disruptions and grow their US workforce, Martin said.
“We believe this move towards more quality manufacturing jobs in North America will both provide tailwind to our business and a trend that we can nurture and accelerate in our local communities for the benefit of multiple stakeholders across the manufacturing ecosystem.”
As more companies look to technologies like additive manufacturing to drive product innovation, Fathom believes the partners, who value the small- to medium-volume manufacturing market at $ 25 billion, will win.
“The existing possibilities for our corporate customers are not suitable to keep up with the new market reality,” said Martin. “Enterprise customers must choose whether to invest in increasingly expensive in-house capacity or to outsource to options that either lack the required size or focus on the enterprise market to deliver end-to-end solutions. We offer a one-stop outsourcing solution for corporate customers and the breadth and scalability of our offering has taken decades and is almost impossible to replicate. “