Desktop Metal to Go Public Through Blank Check Company at $2.5 Billion
Founded by Chief Executive Ric Fulop, a former investor at North Bridge Venture Partners, Burlington-based Desktop Metal Inc. is the latest Massachusetts company to go public in 2020. That was possible to accomplish due to an accelerated procedure called reverse merger.
Desktop Metal raised $438 million from various investors, such as Koch Disruptive Technologies, BMW iVentures and Ford Motor Co, thus becoming one of the fastest United States companies to achieve unicorn status in the process.
Officials from the 3-D printing company announced on Wednesday that they agreed to become a publicly traded company through a merger deal with a special purpose acquisition company, or SPAC. In their official release, Desktop Metal stated they had signed a merger agreement with Trine Acquisition Corp. (NYSE: TRNE), a SPAC led by Leo Hindery Jr. and HPS Investment Partners and this combined, operating company will be named Desktop Metal Inc.
With this new deal, Trine will merge with Desktop Metal to create a company worth up to $2.5 billion, where as Desktop Metal’s most recent valuation from January 2019 had the company value at $1.5 billion.
The company were forced to lay off employees earlier this year because it was faced with disruptions in physical production during the pandemic, however, it seems like the businesses are growing again. Furthermore, it serves customers from transportation to aerospace, including Honda, BMW and Lockheed Martin and has distribution channels in 60 countries.
As mentioned at the beginning, Desktop Metal is the fourth Massachusetts company to go public this year and other three companies that already went public this year include:
- Daily fantasy sports betting company DraftKings Inc. (Nasdaq: DKNG) which also went public via a reverse merger,
- Amwell and
- Duck Creek Technologies (Nasdaq: DCT)
It is worth mentioning that Desktop Metal is the first major Massachusetts-based 3-D printing to go the public.
Post-SPAC plans
Desktop Metal is planning to make its own acquisitions, referred to as a “constructive consolidation” of the additive manufacturing/3D printing industry.
Moreover, this deal will position Desktop Metal as a primary player in 3D printing innovation. The technology fulfilling its potential to truly backtrack manufacturing after years and years of buzz can be finally seen.
In just five years since it was founded, Desktop Metal has most certainly demonstrated pretty impressive breakthroughs and has acquired a number of big name partnerships.
Desktop Metal, Duck Creek and Amwell
A software company from Boston, Duck Creek, serves some of the largest property-and-casualty insurers, offering up to $200 million in July and began trading in mid-August. In spite of the corona virus pandemic, its sales have continued to grow.
Health IT company from Boston, Amwell plans to go public on the New York Stock Exchange under the ticker AMWL. Furthermore, they stated that Google had already agreed to purchase $100 million worth of shares.
TRNE will merge with Desktop Metal at a reported $2.5 billion pro forma equity value. The existing shareholders of Desktop Metal will hold about 74 percent of the shares of common stock right after closing of the deal, as it was reported.
The transaction is expected to be completed in the fourth quarter.
