Fast Radius Inc. is reaching a deal with a specialist acquisition company that would value the digital manufacturing company at around $ 1.4 billion and go public with it, people familiar with the matter said.
Supported by investors including United Parcel Service Inc.,
Fast Radius uses a cloud-based software platform and manufacturing techniques, including 3D printing, to manufacture unique parts, thereby accelerating product and supply chain development for customers. His other partners and customers include household products vendor Colgate-Palmolive Co. and baseball glove maker Rawlings.
Fast Radius also works with other companies in the industry, such as 3D printing technology company Carbon, to produce parts.
Chicago-based Fast Radius is close to entering into a deal to combine with green-focused SPAC ECP Environmental Growth Opportunities Corp., the people said. An agreement could be announced as early as this week.
The company would join many others related to technology and manufacturing that are going public by combining with PSPCs. These companies are attracting investors who see huge potential for growth, as large corporate clients aim to accelerate innovation, simplify supply chains and reduce emissions.
Friday, Fathom Digital Manufacturing Corp. unveiled a PSPC deal of roughly $ 1.4 billion. Other companies in space to accept SPAC mergers in recent months include Desktop Metal Inc.,
Velo3D Inc., Bright Machines, Markforged and Shapeways.
Two other publicly traded companies linked to manufacturing modernization: 3D Systems and ExOne Co.
– have been among the most popular names in the stock market at times over the past year, although their stocks have been falling in recent times.
Wall Street’s enthusiasm for the industry and future technologies allows many of these companies to go public at high valuations and raise funds to invest in their businesses. Fast Radius is expected to generate around $ 445 million in its SPAC deal from money held by the so-called blank check company and a $ 100 million private investment in public stocks, or PIPE, have people said.
PIPE is expected to include a forward purchase agreement with Goldman Sachs Asset Management LP and investments from UPS and data mining software company Palantir Technologies Inc.,
said the people.
PSPC mergers have become common alternatives to traditional initial public offerings or additional private fundraising for companies like digital product makers in recent months, in part because they let startups make future projections. These are not allowed in an IPO.
A PSPC is a shell company that is publicly traded for the sole purpose of partnering with a private company to make it public. The private company then obtains the place of the SPAC on the stock exchange. Proponents of blank check agreements say they are more effective for fast growing companies, but skeptics warn they can benefit PSPC creators and result in losses for individual investors due to the large amount of ‘shares and other investments granted to insiders.
ECP SPAC is backed by private equity firm Energy Capital Partners and raised $ 345 million in February. Energy Capital Partners was founded in 2005 by Doug Kimmelman, a former investment banker with Goldman Sachs Group Inc. specializing in the energy and utilities sectors.
PSPCs have raised a record high of around $ 115 billion this year, according to data provider SPAC Research, but fundraising has slowed in recent months as shares of some companies that have gone public through PSPCs struggle. and that regulators increase their oversight of the sector.
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Appeared in the print edition of July 19, 2021 under the title “Fast Radius To Listing Its Stock Via SPAC”.