Markforged acquires Digital Metal

Reinventing manufacturing with The Digital Forge

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Markforged Massachusetts
Markforged is planning to relocate its headquarters to Waltham, Massachusetts, USA to cope with its expansion

Markforged, which has developed several 3D printing systems, is set to acquire Digital Metal, which has developed a binder jetting additive manufacturing platform that’s suitable for producing small intricate metal parts with an excellent surface finish and repeatable accuracy.

Digital Metal was originally set up in 2003 as a wholly-owned subsidiary by the Swedish company Höganäs, which is a leading metal powder producer. Höganäs is planning to expand further within the metal powder side of additive manufacturing and will use the money from this sale to invest and acquire other companies in that area. Ultimately Höganäs’ ambition is to become the first producer of green metal powder.

Fredrik Emilson, CEO of Höganäs, commented, “Höganäs has built a world-leading AM technology company within binder jetting and we are pleased to see that Digital Metal now will become a fully owned subsidiary of Markforged. This is a company well equipped to continue the development of Digital Metal and their quest to set a new benchmark in 3D metal printing.”

Markforged will pay Höganäs approximately US$ 32 million in cash as well as around 4.1 million shares of Markforged common stock plus a further sum of roughly US$ 1.5 million in cash to settle certain intercompany balances, subject to certain adjustments. The deal is expected to close during the third quarter of 2022, subject to the usual conditions.

Markforged started off by developing an interesting range of 3D printers using plastic filament but combined with carbon fibre for added strength. From here, the company developed a manufacturing platform, complete with printers plus production and ordering software, that it collectively calls the Digital Forge, that aimed to help customers migrate parts from conventional to additive manufacturing.

The company was originally founded in 2013 by Greg Mark and David Benheim, both of whom have recently left the company. Markforged is currently headed by president and CEO Shai Terem, who previously led Kornit Digital’s American operation.

Terem explained, “With the Digital Metal acquisition, Markforged is advancing our vision for distributed manufacturing by enabling the reliable, high volume production of precise metal parts at the point of need. Infusing Digital Metal’s solution into The Digital Forge platform allows us to address new applications in the medical, automotive, luxury goods and other industries.”

He added, “The Digital Metal team has created a robust and scalable solution that complements our existing technologies. I look forward to welcoming their talented people to Markforged.”

Markforged also recently acquired Teton Simulation Software, which developed SmartSlice technology. This integrates with slicer programs and replaces the typical print-break-repeat prototyping cycle which speeds up development and reduces the time and cost of production-quality parts. Markforged will integrate this with its own Eiger 3D software as a subscription add-on. The idea is that it will help customers take the guesswork out of configuring slicing parameters for end-use requirements, knowing they can estimate part performance, saving both the time and waste that physical testing involves.

Terem commented at the time, “Software is the core of Markforged’s solution and our competitive edge. The acquisition of Teton Simulation advances our industry leadership in using software to increase process automation and offers our customers an easy way to validate their parts on the same platform they use to print them. Adding this functionality enables our customers to utilize The Digital Forge deeper into their manufacturing operations.”

Markforged’s latest full year results for the year ending 31 December 2021 show revenue of US$ 91.2 million, up from US$ 71.9 million in 2020, with gross profit of US$ 52.9 million, up from US$ 41.9 million the previous year. However, this translated into a net loss from operations of US$ 61 million, down from a net loss of US$ 17.7 million in 2020. After adjustments for EBITDA, the loss was US$ 38.7 million, compared with US$ 13.4 million the year before.

Terem commented, “This has been a tremendous growth year for Markforged. We executed on the plan we shared a year ago and beat our targets for 2021, making Markforged one of the fastest organically growing additive manufacturing companies, with industry-leading gross margins.”

He added, “Thanks to the hard work of our team, we exceeded growth targets for both the fourth quarter and full fiscal year. We saw a 27% organic growth rate in 2021, as the Digital Forge continued to solve manufacturing challenges for customers around the world. Our closely integrated hardware, software and materials are designed to allow our customers to overcome ongoing global supply chain constraints by printing industrial-strength parts for critical applications directly at the point-of-need.” Markforged is predicting revenue of US$ 114 – 123 million for this year.

Earlier this year Markforged announced plans to relocate its headquarters to Waltham, Massachusetts in the US to cope with its expansion. The new building has space for up to 500 staff. Terem explained, “I am most excited about bringing our corporate, commercial, and engineering teams together under one roof to fuel collaboration and innovation. Working as one team is the most important value of our culture and our success, and this new space will empower our employees to work side by side to fulfill our mission to reinvent manufacturing.”

At the same time, the company is also planning to nearly double the size of its filament manufacturing facility in Billerica, Massachusetts by the end of next year. You can find more details from markforged.com, digitalmetal.tech and hoganas.com.

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