As I suspected, Essentium is the latest 3D printing business to transform into a publicly-traded company.
Today the Texas-based company announced plans to merge with a publicly traded company, Atlantic Coastal Acquisition Corporation. The resulting combined entity is to trade on the NASDAQ exchange under the trading symbol, “ADTV”.
Essentium, launched only in 2013, now provides a line of industrial-level 3D printers capable of end-use part production in a wide variety of engineering materials. The company is also known for its high-speed printing systems, which derive their speed from the team’s prior expertise in building high-speed circuit board systems.
The company has spent considerable effort to work with manufacturers to fine-tune their systems for specific applications. Often this involves sophisticated combinations of both hardware and software to achieve high quality results.
The details of the transaction are a bit different from other public transformations recently in the 3D print industry. Some companies simply do the copious paperwork to declare an “IPO”, or “initial public offering”, which others use the “SPAC” approach, where a shell company that’s already trading publicly “acquires” the private company and is subsequently renamed the same as the original private company. It’s a kind of back-door approach for getting on a market.
Essentium’s approach is different. Here they instead merged with a specialized company that’s already on NASDAQ. The company’s name, “Atlantic Coastal Acquisition Corporation” is a bit of a giveaway in that regard.
After the merger, the intended result is that Essentium shareholders will retain about 64% of the the combined entity, while Atlantic Coastal Acquisition Corporation shareholders will hold the rest — unless some of Atlantic Coastal Acquisition Corporation’s shareholders exercise options to exit the company. In that case, arrangements have been made for investors to scoop up the shares from existing Atlantic Coastal Acquisition Corporation investors.
The management of the company going forward will be the existing Essentium executive team, but Atlantic Coastal Acquisition Corporation will have representation on the new board of directors.
The combined entity is expected to have a market valuation of around US$974M, which includes US$346M in cash. This valuation would put Essentium in the mid-range of our 3D print market leaderboard, which we publish each Sunday.
Essentium expects the deal to close “around the end of the first quarter of 2022”, so there’s some time before they appear on NASDAQ. This allows time for all the numerous paperwork steps to be completed, and certainly approval by the U.S. Securities and Exchange Commission.
For Essentium, this is obviously very good news. While it will burden the company with additional work required to maintain public presence, it also opens the door for significant growth. As the company’s stock value rises, it will be possible for Essentium to raise huge investment amounts for any conceivable expansion, research and development, sales campaigns or, more likely, acquisitions of other related companies.