The AM industry is consolidating
As predicted by industry observer Sarah Goehrke, 2021 turns out to be the year of consolidation for the AM market.
This trend is happening in the broader context of 1/ the advent of digital manufacturing, enabled in part by additive manufacturing, and 2/ an overall bull market unlocking an influx of cash from VCs and enabling several IPOs in the AM industry. As a consequence, the fragmented AM landscape shows signs of maturing with a growing number of mergers and acquisitions.
We’ve put together a quick visualization of the main deals in 2021 so far (plus 3 takeaways, and my personal take on this matter below the graph).
- Desktop Metal: a giant in the making
The metal AM startup-turned-behemoth chose the path of external growth and went shopping this year, in the wake of its 2020 IPO. The company made the rounds with a string of acquisitions, from hardware to applications companies, including industry staples such as EnvisionTEC and ExOne. Despite these acquisitions (and the massive PR efforts), the DM stock is at an all-time low, sitting slightly above $7 at the time of writing- far below the $31 peak from just a few months ago in February ‘21.
- OEMs acquiring software companies
AM hardware manufacturers are increasingly acquiring software platforms (MES and cloud-based manufacturing OS). BCN3D, NanoDimension, and 3D Systems all acquired existing AM software companies in 2021. Another huge sale in the making is the acquisition of MES company Link3D by 3D printing service giant materialise.
- On-demand manufacturing services: reaching the critical size
There is also a consolidation trend among digital manufacturing/on-demand services (aka MaaS companies). This year, Protolabs absorbed Dutch company Hubs (formerly 3D Hubs) and French AM giant Prodways acquired German AM service bureau Creabis, all while US MaaS giant Fathom gears up for its IPO, following Xometry’s step. The end game here is to reach a critical size to scale operations and capture a bigger share of the fast-growing digital manufacturing market.
My personal take: it was somehow expected to see consolidation in the AM landscape, with such a highly fragmented offering and a strong momentum. But the current trend may not last long when the VC/IPO dollars stop flowing. The current frenzy of deals in a race to become TBTF (too big to fail) could turn ugly for some actors if business fundamentals are not healthy.