Technology-enabled manufacturing company, Proto Labs, has entered into an agreement to acquire privately held Rapid Manufacturing Group, doing business as Rapid Prototype.
Rapid Prototype specializes in quick-turn sheet metal fabrication and computer numerical control (CNC) machining. The acquisition will add sheet-metal skills to Proto Labs’ fast manufacturing, as well as while expanding the company’s CNC machining capabilities.
Rapid was founded in 2001 with the idea of delivering sheet metal parts faster than traditional methods. Proto Labs was also founded to manufacture parts quickly, though its capabilities were focused on 3D printing and machining. Over the years, Rapid expanded its capabilities to include CNC machining. The company now operates in a 140,000-square-feet of manufacturing space in New Hampshire, while employing 300 people. The acquisition will expand Proto Labs’ employment to more than 2,000 people worldwide.
A Complementary Mix of Services
Proto Labs VP and GM Rob Bodor characterized the acquisition as a complementary. “They have an excellent cultural fit with Proto Labs. They’re focused on prototype and low-volume manufacturing that requires speed,” Bodor told Design News. “They transact through the Internet like we do. They have also have process innovations in manufacturing speed.”
The acquisition gives new capabilities to Proto Labs, in both sheet metal and in expanded CNC. “They have sheet metal that we don’t offer. Three-fourths of our customers say that’s a need for them, so that’s something we can now offer,” said Bodor. “On CNC machining, while we offer it, they’re set up for larger and high-tolerance parts. That expands the envelope of the parts we can accept and serve to our customers."
Expanding with the New Acquisition
As well as buying new capabilities, Proto Labs gains a new set of customers. “They have customers we don’t have,” said Bodor. “Some overlap, but even those that overlap are buying different things from Rapid. That gives us additional capabilities for our customers, while also bringing in customers we don’t have a relationship with.”
Bodor doesn’t expect any cutbacks to come from the acquisition. “This is about growth. We do not plan to make reductions. We expect to stay in the New Hampshire area and expand into additional space there,” he said. “That’s been our pattern. When we acquired FineLine Prototyping in 2014, we invested capital in the business and grew that business 80% in the first year.”
Proto Labs will acquire Rapid for the price of $120 million, which consists of $110 million in cash and $10 million in Proto Labs stock. Rapid’s 2017 annual revenue is forecasted to be approximately $45 million. The transaction is expected to close by the end of the year.
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Rob Spiegel has covered automation and control for 17 years, 15 of them for Design News. Other topics he has covered include supply chain technology, alternative energy, and cyber security. For 10 years, he was owner and publisher of the food magazine Chile Pepper.
Image courtesy of Proto Labs.