Velo3D CEO Benny Buller Resigns Amidst Potential Sale or Merger Explorations


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Metal 3D printing firm Velo3D (NYSE: VLD) has announced that Benny Buller has resigned as CEO at the request of the company’s Board of Directors. The news comes at a time when the entire publicly traded additive manufacturing (AM) industry is facing economic pressure for organizational change and the larger sector undergoes a transformation into industrial production.

“I want to thank Benny for his tireless efforts over the last nine years from founding the company to making Velo3D the technology leader in the rapidly growing additive manufacturing industry,” said Carl Bass, Chairman of the Board of Velo3D. “We are incredibly grateful to Benny for all his contributions. However, given the current environment, the Board believed a change would best position the company for future success. We look forward to continuing to benefit from Benny’s experience at the board level as we execute on our strategic technology and profitability initiatives.”

In response to this change, the Board has appointed Brad Kreger as the Interim CEO, effective from December 18, 2023. Kreger, who joined Velo3D in December 2022 as the Executive Vice President of Operations, brings a wealth of experience in managing and scaling manufacturing operations. His background includes significant roles at Affymetrix, Thermo Fisher Scientific, and Fluidigm Corporation. The search for a permanent CEO is underway as Velo3D prepares for its next phase of growth.

Velo3D’s Finances

Buller stepped down during a time in which Velo3D has experienced substantial growth amid significant financial challenges. As of the trailing twelve months (TTM), total revenue has impressively grown to $100.843 million, indicating a strong market demand for its metal laser powder bed fusion (LPBF) technology, a substantial leap from $18.975 million in 2020. However, this growth is contrasted by considerable operational losses, with an operating income reported at a significant loss of -$99.676 million in the TTM period. The net income for common stockholders also mirrors this trend, showing a considerable loss of -$111.987 million. These figures underscore the high costs associated with Velo3D’s expansion and technological advancements. Furthermore, the company’s operating cash flow is deeply negative at -$113.947 million, despite a healthy end cash position of $29.649 million, reflecting the intense capital requirements of its growth strategy.

The Sapphire XC 1MZ 3D printer from Velo3D. Image courtesy of Velo3D.

Velo3D announced a considerable workforce cut of 20 percent, following the disclosure of its Q3 2023 data. Zach Murphee, a long-standing member of Velo3D, is also leaving the company. He started as Director of Product and Applications about eight years ago, advancing to Vice President of Defense, before he exited to join the competitor, Freeform Future Corporation.

Freeform, unlike its predecessor that mainly manufactures tightly controlled LPBF equipment, relies on a service bureau model to print parts using proprietary LPBF machines possessing 18 lasers. Remarkably, Freeform’s team includes former employees of Velo3D, alongside veterans from Carbon, Tesla, and Apple. Among its clientele is space AM firm Ursa Major.

The company’s restructuring process likely initiated in September, when the Chief Financial Officer, William McCombe, decided to step down. McCombe was instrumental in steering Velo3D through its listing process and growth phase. Following his departure, Bernard Chung, the Vice President of Finance, was named Acting Chief Financial Officer.

Velo3D isn’t the only firm experiencing such a significant transition. 3D Systems brought on a new Chief Financial Officer to boost its operational efficiency, while BICO and Materialise recruited new CEOs. In the case of Materialise, the decision was made over five years. It is plausible to predict additional executive changes throughout the industry. A noteworthy point in the case of Velo3D is the resignation of its founder. Although he remains on the Board of Directors to retain a say in the company’s future direction, it must be challenging to part ways with something he invested so much effort in creating.

Who Will Buy Velo3D?

Amidst the shuffle in leadership, Velo3D’s Board of Directors has taken the initiative to begin a strategic review aimed at exploring different options. These options aim to increase value for shareholders and could result in various outcomes like potential mergers, strategic transactions, business combinations, or even a sale.

This company isn’t operating alone, others are exploring similar options. The entire year witnessed speculations about a possible merger between Stratasys and another 3D printing company such as Desktop Metal (NYSE: DM), Nano Dimension (Nasdaq: NNDM), or 3D Systems (NYSE: DDD). Concurrently, voxeljet, a company known for manufacturing large-format sand and polymer 3D printers, publicly announced its pursuit of strategic transactions. Sigma Additive Solutions sold its intellectual property to Divergent Technologies while Stratasys divested some of its services.

There is a possibility that 3D Systems is on the lookout for potential buyers to acquire its software business Oqton. It is noteworthy that Carl Bass, a member of Velo3D’s Board, had also served on Oqton’s Board. Carl Bass, who held the position of Autodesk’s CEO, currently serves as a Director for other AM companies like Formlabs, nTopology, Dyndrite, and Arris Composites.

If Velo3D goes ahead with a merger or sale, it’s key to ponder who might be the other party. There’s a myriad of firms who might decide to acquire Velo3D to create vertical integration thanks to its relevance to the new space industry, including VAST, Ursa Major, and SpaceX. The last of these, SpaceX, was among the early investors in Velo3D equipment, so a potential acquisition isn’t out of question. This would also sync with the overall approach by ARK Investment Management, considering ARK CEO Cathie Wood’s backing of Elon Musk’s companies and ARK’s investment in Velo3D. Musk might even consolidate several AM firms like Markforged and Velo3D and establish a 3D printing giant.

On the other hand, a merger with another printer producer such as Stratasys might come about. However, currently all these enterprises are facing a serious economic slump, rendering it unlikely for them to do so, unless Nano Dimension still has enough reserve after its stock repurchase.

This news breaks at a time when Chinese LPBF makers are branching out swiftly into the western market. Riding on its eight-laser Sapphire XC system, Velo3D has significant stake in the Laser Wars, embodied by large-format LPBF machines sporting plenty of lasers. Post the commencement of the Laser Wars by Nikon SLM Solutions and Velo3D, these Chinese entities have surpassed the scale and energy yield of these systems with huge 3D printers powered by 20-plus lasers. This not only usurps the industry-leading 12-laser PBF system by Nikon SLM, but also overtakes Freeform’s 18-laser configuration. There’s a high chance Velo3D has been impacted by its Asian competitors.

Without a doubt, strategic transactions don’t necessarily indicate a sale or merger. Velo3D asserts that its operations and customer service capabilities will continue unaffected throughout this review and transition period. As for updates regarding the strategic review, it’s stated by Velo3D that disclosures will only be made when suitable or requisite.

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