Fathom Digital Manufacturing Corp. is close to an agreement with a special-purpose acquisition company to go public in a deal that values the 3-D printing firm at about $1.4 billion, people familiar with the matter said.
Based in Hartland, Wis., Fathom uses digital manufacturing techniques to quickly make prototypes and complex manufacturing parts for its customers. Fathom says it helps blue-chip companies innovate and solve operational challenges.
Fathom is close to a deal to combine with the SPAC Altimar Acquisition Corp. II, the people said. The merger could be announced as soon as Friday.
The firm is one of several attempting to tap into a booming market for 3-D printed products, with more companies across industries seeking to simplify supply chains, bring down costs and minimize their environmental footprints.
Owned by the private-equity firm Core Industrial Partners, Fathom would join many 3-D printing companies going public through SPACs.
Desktop Metal Inc.
went public via a SPAC backed by the same investment firm—HPS Investment Partners LLC—that backs Altimar. Other companies in the space to recently unveil so-called blank-check deals include Velo3D Inc., Markforged and Shapeways.
With investors excited about the industry’s growth potential, many of these companies are drawing lofty valuations and raising large sums through their SPAC deals. Fathom would be expected to generate about $425 million in cash proceeds through its merger from the $345 million held by the SPAC and a $80 million private investment in public equity, or PIPE, the people said.
Fathom has several manufacturing facilities across the U.S. and hopes to differentiate itself from early-stage companies going public via SPACs by touting its existing business, the people said. Fathom posted about $150 million in sales in its 2020 fiscal year, they said.
Also called a blank-check company, a SPAC is a shell firm that lists on a stock exchange with the sole purpose of merging with another firm to take it public. SPAC deals have emerged as a popular alternative to a traditional initial public offering in the past 18 months, partly because they allow companies such as 3-D printing firms to make business projections, which an IPO wouldn’t allow.
SPAC executives say the deals are accelerating growth for disruptive companies, while skeptics contend that they disproportionately benefit insiders who are granted unique incentives.
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Altimar raised $345 million in February and is one of several SPACs backed by HPS. One of them took Desktop Metal public late last year, while another combined with Owl Rock Capital Partners LP and Dyal Capital Partners to create
Blue Owl Capital Inc.
SPACs have raised a record of roughly $115 billion this year, according to data provider SPAC Research. Issuance, however, has slowed in recent months, as shares of some popular companies that merged with SPACs struggle and regulators increase their scrutiny of the sector.
Shares of Desktop Metal and the blank-check companies taking other 3-D printing companies public have struggled in recent months as have other publicly traded names in the space such as 3D Systems and
ExOne Co.
Write to Amrith Ramkumar at [email protected]
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