Essentium to Enter SPAC Merger, Go Public as It Advances Sustainable Additive Manufacturing

BASF-backed Essentium's customers include the DoD, as the on-site 3D printing company approaches $1B valuation.


Essentium says it can provide on-site 3D printing of aerospace materials in full production.

Essentium Inc. yesterday announced that it has entered into a definitive business combination agreement with Atlantic Coastal Acquisition Corp. The Pflugerville, Texas-based additive manufacturing company said it expects use the $346 million in cash from the deal to fund organic growth initiatives.

Founded in 2013, Essentium said it develops industrial 3D printing solutions across systems, materials, software, and services “to enable a new distributed and sustainable manufacturing footprint.” The company claimed that its ecosystem can quickly create high-quality parts that match the strength of injection molding in full-scale production at a very low total cost of ownership (TCO).

“Essentium is transforming the future landscape of supply chains by delivering truly distributed, sustainable manufacturing and operating solutions within all contexts including the ability to operate successfully in contested logistics environments,” stated Blake Teipel, Ph.D., CEO of Essentium. “Fundamental deficits in our existing global supply chain models are being exacerbated by escalating obstacles such as trade imbalances and the global pandemic—all leading to protracted distribution bottlenecks.”

“Today’s announcement represents a major milestone in our efforts to provide long-term, sustainable solutions for a new manufacturing paradigm that can meet these global challenges head-on,” he added. “Essentium’s solution deploys regional, distributed production capabilities to enable supply chain transparency, and flexible inventory management at a highly competitive TCO, all while reducing waste and supporting a limited carbon footprint through on-site printing.”

Essentium promises fast 3D printing in production

Essentium said its intellectual property (IP) portfolio includes more than 150 patents to date across polymer and metal systems, processes, and materials. The company noted that its management team has experience with material science and supply chains

According to Essentium, its line of High-Speed Extrusion (HSETM) 3D printing platforms are five to 15 times faster than conventional extrusion additive manufacturing systems. It claimed that its technology can capture critical parameters in real time via high-fidelity data streams at a rate that is on average 14 times faster per variable than traditional additive manufacturing.

On-site printing can reduce logistics requirements and limit the carbon footprint of advanced manufacturing, said the company. It added that its sustainable manufacturing systems can eliminte more than 70% of waste in comparison with traditional manufacturing.

Essentium said the total addressable market (TAM) for its global machine tooling, jigs, fixtures, and thermoplastics offerings, as well as military applications, is $209 billion. The company's customers include the U.S. Department of Defense (DoD), Lockheed Martin Corp., and Ford Motor Co. It said the DoD alone represents a $20 billion revenue opportunity.

In addition to its FlashFuse technology and polymer- and polymer-composite products, Essentium said it is developing metal additive systems to offer unique metallurgies and advanced microstructures for applications with demanding structural integrity. The company added that it expects its investments in metal printing systems and digital manufacturing initiatives to create opportunities in an estimated $318 billion TAM.

SPAC looks to advance sustainable additive manufacturing

Upon completion of the transaction with special-purpose acquisition company (SPAC) Atlantic Coastal, which is expected to occur around the end of the first quarter of 2022, the combined company will retain the Essentium name. It expects to be traded on The Nasdaq Stock Market LLC under the new ticker symbol “ADTV.”

“We launched Atlantic Coastal with an ESG-centric [environmental, social, and corporate governance] focus and a mandate to partner with a company that will transform the nature of international commerce,” said Shahraab Ahmad, chairman and CEO of Atlantic Coastal. “We believe that Essentium, with its potential to change the global supply chain, is exactly that partner.”

“We believe that following this transaction, Essentium will be extremely well-positioned for rapid growth as it further expands its ecosystem offerings, capitalizes on its line-of-sight sales pipeline, and executes on its M&A strategy as it continues to advance additive manufacturing as a public company,” said Tony Eisenberg, chief strategy officer of New York-based Atlantic Coastal.

Following the closing of the proposed transaction, Essentium will continue to be led by its existing management team including Teipel, Chief Operating Officer Lars Uffhausen, and Interim Chief Financial Officer Jonathan Bailiff. Its board of directors will include Burt Jordan, president of Atlantic Coastal and a former executive at Ford.

Transaction details

The proposed business combination values the combined company at a $974 million pro forma enterprise value, at a price of $10 per share and assuming no redemptions by Atlantic Coastal shareholders. Essentium projected revenue for 2023 is $212 million. The proposed transaction is expected to deliver up to $346 million of net proceeds to the company, assuming no redemptions and net of transaction expenses.

It will include a fully committed common stock PIPE [private investment in public equity] of over $40 million at $10 per share. It will be led by institutional and strategic investors including BASF, Atalaya Capital Management LP, and Apeiron Investment Group. Atlantic Coastal’s management team is also contributing $20 million to the PIPE.

Existing Essentium shareholders will roll over 100% of their equity into the combined company. Following the closing of the transaction, these shareholders are expected to hold approximately 64% of the issued and outstanding shares of common stock.

Atlantic Coastal and ACM ARRT VII C LLC, an affiliate of Atalaya, have agreed to conduct a joint tender offer for up to 10 million shares held by Atlantic Coastal stockholders seeking to exercise redemption rights in connection with the closing of the proposed transaction.

The business combination depends on approval by Atlantic Coastal’s shareholders, the concurrent PIPE transaction, and satisfaction of the conditions stated in the definitive agreement. It is also pending other customary closing conditions and regulatory approvals, as well as approval by Nasdaq to list the securities of the combined company.

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Essentium says it can provide on-site 3D printing of aerospace materials in full production.

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