Essentium to Become A Public Company

Essentium, Inc. has entered into a definitive business combination agreement with Atlantic Coastal Acquisition Corporation. 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 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 addresses full-scale production runs, producing parts that can match the strength of injection molding at a very low total cost of ownership, the company reports. 

“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,” says Blake Teipel, Ph.D., chief executive officer 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. 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,” says 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,” says Tony Eisenberg, chief strategy officer of Atlantic Coastal Acquisition Corp.

Essentium Investment Highlights

• Advanced technology includes Essentium’s line of High Speed Extrusion (HSE) 3D printing platforms; Essentium’s data capture abilities enable real-time capture of critical parameters via high-fidelity data streams.
• Marquee customer base includes the U.S. DoD, Lockheed Martin Corporation and Ford Motor Company , 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 date
• Continuing to innovate beyond its lineup of polymer- and polymer-composite solutions, including its FlashFuse technology, Essentium is developing a suite of metal-additive systems designed to offer metallurgies and advanced microstructures for applications with structural integrity. 

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.

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 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.

Sources: Press materials received from the company and additional information gleaned from the company’s website.