Essentium is transforming the future landscape of both supply chains and manufacturing through sustainable solutions across multiple global industries
Essentium’s sustainable manufacturing solution eliminates over 70% of waste versus traditional manufacturing; on-site printing reduces heavy logistics requirement and limits carbon footprint
Marquee global customer base includes the U.S. Department of Defense (“DoD”), which offers a $20 billion revenue opportunity alone1 out of an immediate total addressable market (“TAM”) of $209 billion
Essentium’s growing pipeline of more than 280 customers comprises approximately $3.4 billion in revenue opportunity
Highly advanced technology backed by an extensive intellectual property (“IP”) portfolio of more than 150 patents to date
Existing Essentium shareholders, including BASF SE (“BASF”), the world’s largest chemical producer, are rolling over 100% of their equity into the combined company
The combined company is expected to have an implied pro forma enterprise value of $974 million, including $346 million in cash on the balance sheet following the transaction, assuming no redemptions and net of transaction expenses. All proceeds are expected to primarily fund organic growth initiatives
The transaction includes $345 million cash held in trust by Atlantic Coastal as well as a fully committed common stock PIPE of over $40 million anchored by strategic and institutional investors including BASF, Atalaya Capital Management LP (“Atalaya”) and Apeiron Investment Group (“Apeiron”), the private investment firm of entrepreneur and investor Christian Angermayer
The transaction also includes a commitment by an affiliate of Atalaya to co-tender for up to 10 million shares from redeeming stockholders at closing, and a forward purchase agreement by Atlantic Coastal for the same amount of shares
Transaction is expected to close around the end of the first quarter of 2022 and the combined company anticipates being listed on the Nasdaq under the ticker symbol “ADTV”
Essentium, Inc. (“Essentium” or the “Company”), a leading innovator of industrial additive manufacturing solutions, announced today that it has entered into a definitive business combination agreement with Atlantic Coastal Acquisition Corporation (NASDAQ: ACAH) (“Atlantic Coastal”). Upon completion of the transaction, which is expected to occur around the end of the first quarter of 2022, the combined company will retain the Essentium name and is expected to be traded on The Nasdaq Stock Market, LLC (“Nasdaq”) under the new ticker symbol “ADTV.”
Founded in 2013, Essentium is an advanced manufacturing ecosystem provider that develops industrial 3D printing solutions across systems, materials, software, and services to enable a new distributed and sustainable manufacturing footprint. The Company’s ecosystem cost-effectively addresses full-scale production runs, producing parts that can match the strength of injection molding at a very low total cost of ownership (“TCO”) compared to industry peers. Essentium’s ability to create high quality parts using best- in-class printing speeds, all while maintaining a disruptive TCO, has enabled the Company to unlock substantial value for additive manufacturing applications.
“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,” Blake Teipel, Ph.D., Chief Executive Officer of Essentium, said. “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. 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.”
“We launched Atlantic Coastal with an ESG-centric focus and a mandate to partner with a company that will transform the nature of international commerce, and we believe that Essentium, with its potential to change the global supply chain, is exactly that partner,” said Shahraab Ahmad, Chairman and Chief Executive Officer of Atlantic Coastal. “Blake and his experienced team have developed a deep technology moat, a product ecosystem validated by the DoD, and a razor/razor-blade model that delivers significant recurring revenue, supporting gross margin expansion and highly attractive unit economics.”
“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 Atlantic Coastal Acquisition Corp.
Christian Angermayer, advisor to Atlantic Coastal Acquisition Corp, added, “I am excited to be an investor in Essentium which will revolutionize additive manufacturing through its proprietary platform. They are driving transformative changes to the global supply chain and I look forward to seeing their growth as a public company.”
Essentium Investment Highlights
Highly advanced technology includes Essentium’s line of High Speed Extrusion (HSETM) 3D Printing Platforms, which are 5 to 15 times faster compared to incumbent extrusion additive manufacturing systems; Essentium’s transformational data capture abilities enable real-time capture of critical parameters via high-fidelity data streams at a rate that is on average 14 times faster per variable than traditional additive manufacturing
Currently serves a $209 billion TAM by meeting a range of commercial and mission critical use cases for its global machine tooling, jigs, fixtures, and thermoplastics offering, as well as relevant DoD applications
Marquee customer base that includes the U.S. DoD, Lockheed Martin Corporation and Ford Motor Company (“Ford”), among other aerospace and defense, government, and blue-chip industrial customers
Extensive IP portfolio across polymer and metal systems, processes, and materials, with more than 150 patents to dat
Highly experienced management team with deep material science and supply chain backgrounds
Continuing to innovate beyond its lineup of polymer- and polymer-composite solutions, including its FlashFuseTM technology, Essentium is developing a suite of metal-additive systems designed to offer unique metallurgies and advanced microstructures for applications with demanding structural integrity. Essentium’s investment in metal additive solutions and new investment in digital manufacturing initiatives is expected to carve out incremental market opportunities for an all-in estimated $318 billion TAM.
Following the closing of the proposed transaction, Essentium will continue to be led by its existing management team including Dr. Blake Teipel, Chief Operating Officer Lars Uffhausen, and Interim Chief Financial Officer Jonathan Bailiff, and by an experienced Board of Directors including Burt Jordan, President of Atlantic Coastal Acquisition Corp. and a former executive at Ford.
Transaction Overview
The proposed business combination values the combined company at a $974 million pro forma enterprise value, at a price of $10.00 per share and assuming no redemptions by Atlantic Coastal shareholders, offering an attractive valuation of 4.6x Essentium’s projected 2023E Revenue of $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, including a fully committed common stock PIPE of over $40 million at $10.00 per share led by institutional and strategic investors including BASF, Atalaya and Apeiron. 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 the shares held by Atlantic Coastal stockholders seeking to exercise redemption rights in connection with the closing of the proposed transaction. Subject to certain limitations, Atalaya has agreed to purchase the first 10 million shares tendered by stockholders exercising such redemption rights, while Atlantic Coastal will purchase any shares in excess of 10 million shares tendered for redemption. To the extent that the number of shares tendered by stockholders exercising redemption rights is fewer than 10 million shares, then (a) Atalaya will purchase any shares tendered by stockholders exercising redemption rights plus (b) Atalaya will purchase shares in a PIPE at $10.00 per share in an amount equal to the difference between 10 million shares minus the number of shares purchased by Atalaya in the tender offer. Subject to early settlement or termination under certain circumstances, Atlantic Coastal has agreed to purchase all of the shares acquired by Atalaya in the joint tender offer or PIPE at the redemption price pursuant to a forward purchase agreement, which provides for the purchase of such shares by Atlantic Coastal along with the related settlement of such forward purchase in cash or shares, at Atalaya’s election, occurring two years thereafter.
The boards of directors of both Essentium and Atlantic Coastal have each unanimously approved the proposed business combination, which is expected to be completed around the end of the first quarter of 2022, subject to, among other things, the approval by Atlantic Coastal’s shareholders of the proposed business combination, the concurrent PIPE transaction, satisfaction of the conditions stated in the definitive agreement and other customary closing conditions, including a registration statement on Form S-4 being declared effective by the U.S. Securities and Exchange Commission (the “SEC”), the receipt of certain regulatory approvals, and approval by Nasdaq to list the securities of the combined company.
Advisors
Jefferies is serving as exclusive financial advisor and capital markets advisor to Essentium and Latham & Watkins LLP is serving as legal advisor to Essentium. Moelis & Company LLC is serving as exclusive financial advisor to Atlantic Coastal, Cantor Fitzgerald & Co. is serving as lead capital markets advisor and private placement agent to Atlantic Coastal, BTIG, LLC and Needham & Company are serving as additional capital markets advisors and private placement agents to Atlantic Coastal, Farvahar Capital is serving as additional capital markets advisor to Atlantic Coastal, and Pillsbury Winthrop Shaw Pitman LLP is serving as legal advisor to Atlantic Coastal.
www.essentium.com