At the end of 2020, we were reflecting on the mergers & acquisitions that would shape 2021. We were ready for the acquisition of Origin by Stratasys, we are ready to see Covestro completes its acquisition of DSM but other acquisitions simply raise so much speculation. Last week saw the acquisition of EnvisionTec by Desktop Metal and today Protolabs announced it has reached a definitive agreement to acquire leading online manufacturing platform 3D Hubs.
With all these mergers & acquisitions, is it too soon to say that 2021 will be THE YEAR of market consolidation?
“The addition of 3D Hubs provides Protolabs a platform to evolve our service model to provide unprecedented manufacturing flexibility to our customers,” said Rob Bodor, Protolabs’ current VP and GM of the Americas and incoming President and Chief Executive Officer. “Our combined organizations will provide the market an industry-leading digital manufacturing solution to serve their needs from idea to prototype to full end-use part production. Together we can fulfill nearly every custom manufacturing need across the product life cycle.”
In 8 years of activity, 3D Hubs has given life to over 6 million custom parts and products through its digital platform. The Dutch company provides customers with instant pricing and design feedback, and orders are fulfilled through thoroughly vetted premium manufacturing partners in over 20 countries worldwide, offering vast manufacturing capacity and a broad range of manufacturing capabilities at a variety of competitive pricing levels.
“The entire 3D Hubs team is thrilled to join Protolabs and continue to revolutionize the manufacturing industry through innovation. At 3D Hubs, our goal is to empower companies to create revolutionary products through supply chain efficiency and reliability. We are confident that partnering with Protolabs will help us advance that mission,” said Bram de Zwart, Co-Founder and Chief Executive Officer at 3D Hubs.
“3D Hubs’ company culture lives and breathes engineering and fast-paced innovation; our team is very excited to partner with Protolabs to build the best on-demand manufacturing solution imaginable,” said Brian Garret, 3D Hubs’ Co-Founder and Chief Product Officer.
Under the terms of the agreement, closing consideration of $280 million will be funded with $130 million in cash and $150 million in Protolabs common stock. An additional $50 million of contingent consideration is payable subject to performance-based targets over two years after close, funded with 50% cash and 50% Protolabs common stock. Protolabs has also established an employee incentive fund payable to 3D Hubs employees based on achievement of both financial performance and employee retention targets.
Protolabs anticipates the acquisition of 3D Hubs will accelerate its revenue growth rate and be marginally dilutive to non-GAAP earnings per share in 2021. 3D Hubs’ 2020 revenue is estimated to be $25 million and the company’s revenue has had a compound annual growth rate of over 200% since 2017. The transaction is expected to close by the end of January, subject to customary closing conditions.
“The acquisition of 3D Hubs is part of the continued evolution of Protolabs as the digital manufacturing leader, serving more and more of our customers’ needs,” said Vicki Holt, Protolabs’ Chief Executive Officer. “Protolabs’ leading in-house technology-enabled manufacturing services combined with 3D Hubs’ global network of premium manufacturing partners will yield the greatest value to our customers for years to come.”
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