The business landscape in recent years has posed challenges for mergers and acquisitions (M&As), and the additive manufacturing (AM) sector has been no exception. However, M&A activity has not come to a standstill, and the latest development in this space is Nexa3D’s acquisition of Essentium. This news comes just ahead of the Formnext 2023 event in Frankfurt, Germany.
Nexa3D, based in Ventura, California, specializes in high-throughput stereolithography (SLA) and polymer powder bed fusion (PBF) platforms. Essentium, on the other hand, is known for its signature High Speed Extrusion (HSE) technology. With these distinct capabilities, Essentium is a valuable addition to the Nexa3D portfolio.
The decision to pursue this acquisition was driven by the synergy between the two companies. Avi Reichental, CEO of Nexa3D, and Blake Teipel, CEO of Essentium, emphasized their shared mindset and the strong rapport between their teams. Teipel explained that Nexa3D’s impressive revenue growth and robust commercial engine made them stand out. Additionally, the resources and infrastructure already established by Nexa3D would have required significant time and investment for Essentium to build on their own. Ultimately, the leaders concluded that this merger presented a compelling opportunity for both parties.
Reichental emphasized that a merger should be based on compelling reasons, rather than driven by fear or insecurity about the future. He stated that combining businesses should not be seen as a substitute for organic growth or as a way to revitalize aging product lines. However, when the combination of two companies allows for scalability and a highly complementary portfolio, it can be a powerful force multiplier. Reichental further noted that the successful outcome of this deal was due to a combination of strong incentives and compatible chemistry, both on a business and personal level.
Essentium has experienced financial challenges, particularly in the face of rising interest rates and a bear market. In 2022, they faced setbacks when a SPAC deal with Atlantic Coastal Acquisition Corp. fell through, causing them to lose out on another acquisition opportunity. However, in hindsight, these events proved to be a blessing in disguise. Instead of navigating the complexities of going public and integrating a new entity, Essentium focused on securing deals in high-value applications such as transportation and IoT. They also strengthened their ties with the US military, participating in the US Navy’s REPTX exercises and providing their HSE platform to the Maine Air National Guard.
Essentium’s government contracting experience was a significant factor that caught Nexa3D’s attention during their evaluation process. It not only added a complimentary range of products to their portfolio but also aligned with their go-to-market strategy. Nexa3D had limited exposure to government-related applications, an area where Essentium excelled.
Overall, this acquisition between Nexa3D and Essentium brings together complementary strengths and expertise. It positions them to have one of the strongest intellectual property (IP) portfolios in the industry. Beyond the business rationale, the personal chemistry between the teams also played a crucial role in the decision-making process. By joining forces, these companies are poised for growth and success in the additive manufacturing sector.
Title: Embracing Synergy: How the Essentium-Nexa3D Merger Opens New Doors in the 3D Printing Industry
Introduction:
The recent merger between Essentium and Nexa3D in the 3D printing industry has caused quite a stir. With Essentium being a material science company and Nexa3D specializing in hardware, software, and applications, the combined entity exhibits a unique synergy that enables them to cater to a wider range of customer needs. In this blog post, we will delve into the complementary aspects of these two companies and explore how their merger opens up new opportunities for growth and success in the ever-evolving world of additive manufacturing.
Filling the Gaps:
One of the remarkable aspects of this merger is how Essentium and Nexa3D seamlessly fill in each other’s gaps. While Essentium specializes in extrusion, which was missing from Nexa3D’s portfolio, Nexa3D brings forth a suite of competencies that allow Essentium to diversify its service offerings. Together, they form a powerful duo, with each company enhancing the other’s strengths and amplifying their market access through a network of resellers.
Expanding Customer Base:
The merger also enables both companies to expand their customer base and cater to a wider range of needs. For Essentium, the addition of Nexa3D’s portfolio allows them to serve government clients who require different types of parts suitable for photoresin or powder bed fusion. This expansion not only enhances Essentium’s value proposition but also empowers their government team with access to a diverse range of solutions.
Optimism for the Future:
As they approach the end of the year on a strong note, the CEOs of Essentium and Nexa3D express their unwavering optimism for the future of the additive manufacturing (AM) sector. Despite economic and geopolitical uncertainty, both CEOs believe that the sector as a whole continues to grow and perform relatively well. They assert that being in the AM industry offers unparalleled opportunities, and the Essentium-Nexa3D merger positions them at the forefront of this thriving sector.
Closing Thoughts:
The Essentium-Nexa3D merger represents a union of two companies that share a common vision for the future of 3D printing. By leveraging their complementary strengths, they aim to revolutionize the industry and open doors to new possibilities. The merger not only enhances their market access and customer base but also fosters a sense of optimism for what lies ahead. As they embark on this new journey together, they are confident that the noise in the data for the sector will fade into the past, and the combined entity will pave the way for a more vibrant and prosperous 3D printing industry.
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