Chicago-based private equity firm CORE Industrial Partners has announced the acquisition of on-demand manufacturing service provider Phoenix Proto Technologies.
The acquisition was conducted via 3D printing service provider RE3DTECH + GoProto, a portfolio company of CORE, and marks the latest step in the firm’s ongoing effort to expand its AM portfolio. To date, CORE has invested $700 million into North America’s lower middle-market manufacturing, industrial technology, and industrial service businesses.
Based in Michigan, Phoenix Proto was founded in 2008 and specializes in design, production-quality aluminum tooling, and injection molding services for prototyping. The company also offers CNC machining and additive manufacturing services, supplying customers in the medical, aerospace and defense, consumer, and industrial end markets.
“Since I founded Phoenix Proto, we have been committed to helping our customers turn their design concepts into quality products by leveraging our depth of technical knowledge and best-in-class engineering solutions,” stated Phoenix Proto founder Bob Lammon.
“Our family, along with a great employee base, have built a differentiated business over the last 15 years, and we believe RE3DTECH is a perfect fit in terms of both culture and long-term strategy,” continued Lammon. “We’re proud and excited to have CORE as a partner as we enter a new chapter of growth for Phoenix Proto.”
CORE Industrial Partners’ ongoing investment in AM
This most recent purchase of Phoenix Proto Technologies continues a trend of acquisitions and investments within the AM industry by CORE over the past few years.
In January 2022, it was announced that CORE had completed the takeover of RE3DTECH. Through this purchase, CORE announced the formation of a “new 3D printing platform”, with the company being traded separately from their other related businesses.
In the deal, CORE inherited a suite of technology which included HP’s 4200, 5200, and 580 machines, along with X7, Mark 2, and Metal X 3D printers from Markforged. CORE also purchased RE3DTECH’s fleet of SLM Solutions SLM 280, EOS EOSINT M 280, and Arcam EBM Q20plus systems. These machines are designed for throughput-oriented 3D printing, featuring multiple lasers, fully automatic operation, and a 350mm x 380mm build volume.
Thus, by procuring Phoenix Proto, CORE adds significant injection molding expertise to the existing additive manufacturing and CNC machining capabilities at RE3DTECH. This expands “our ability to offer both prototyping as well as production volumes across technologies,” according to Rock Lambert, Operating Partner at CORE and Chairman of RE3DTECH. “We are excited to continue to broaden our service offering and cover more needs of our valued customers”, Lambert continued.
Other AM acquisitions by CORE include the 2021 purchase of 3D printing materials manufacturer 3DXTECH, and its subsidiaries Triton 3D and Gearbox 3D. As with RE3DTECH, this deal was hailed as contributing to the formation of a “new Additive Manufacturing platform”. This acquisition was preceded by CORE’s 2020 procurement of GPI Prototype & Manufacturing Services – a metal 3D printing bureau with a focus on direct metal laser sintering technology.
Ultimately, this ongoing investment strategy seems to vindicate CORE’s ambition to build one of the “largest global additive manufacturing companies”. This statement was made in 2019 following the purchase of AM service specialist FATHOM, through portfolio company Midwest Composite Technologies (MCT).
Recent Acquisitions and Additive Manufacturing Merger Activity
CORE’s recent efforts to expand its AM portfolio reflect a broader trend of investment and acquisition within the industry. In January 2023, Japanese optics and imaging multinational Nikon completed the takeover of German metal 3D printer manufacturer SLM Solutions in a deal worth €622M. The move sees Nikon further commit to metal 3D printing, with Nikon CEO Toshikazu Umatate expressing how excited they are to be partnering with SLM. “We value SLM’s capabilities in the metal additive manufacturing space and we look forward to enhancing and growing our digital manufacturing business,” said Umatate.
Elsewhere, Israeli-based 3D electronics printer manufacturer Nano Dimension recently launched an audacious $1.1 billion takeover bid for leading 3D printer manufacturer Stratasys. In July 2022, Nano Dimensions became the largest shareholder in Stratasys, possessing a 14.5% stake in the company.
The company claims that this acquisition, which would equate to $18 per share, would offer a unique opportunity to create significant value for Stratasys, with the combined company being a leader in growth and profitability. “Together, Nano Dimensions and Stratasys can offer an increasingly exciting set of solutions for customers while becoming better positioned to compete in the AME [Additively Manufactured Electronics] and AM industries,” claimed Nano Dimension Chairman and Chief Executive Officer, Yoav Stern.
Nano Dimension itself is subject to a takeover bid, with Canada-based activist investor Murchinson attempting to rally support for the ouster of current board members, including Stern. According to CEO Yoav Stern, the “lowball bottom feeders from Toronto” have their sights set on the cash holding of Nano Dimension. Murchinson has called a meeting of shareholders for March 20th. Nano Dimension advisor FGS Global told 3D Printing Industry, “the notice of a special general meeting issued by Murchinson is invalid and failed to comply with requirements under applicable law, and therefore the Company filed its lawsuit in the courts in Israel seeking a declaratory judgment that the Murchinson meeting is illegal.”
Analysts have said the offer price of $18 per share undervalues Stratasys. Stifel analyst Noelle C. Dilt commented, “We do not find the valuation particularly compelling, as we believe SSYS should see solid growth, margin, and multiple compression over the next three+ years.”
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Featured image shows the Phoenix Proto Technologies Logo. Photo via Phoenix Proto Technologies.