Once considered a leading force within the additive manufacturing industry, Desktop Metal officially filed for Chapter 11 bankruptcy. This move comes amid ongoing efforts to stabilize the company’s financial position and sell off key international subsidiaries. The company filed this week with the U.S Bankruptcy Court for the Southern District of Texas, and will allow for the company to restructure its debt while continuing limited operations. According to recently released court documents, the company lists between $1 billion and $10 billion in both assets and liabilities, with some funds expected to be set aside for unsecured creditors.
As part of its restructuring, Desktop Metal has entered into an agreement to sell several of its international business units, including ExOne GmbH, EnvisionTEC GmbH, ExOne KK, and AIDRO s.r.l., to an affiliate of the investment firm Anzu Partners. The acquisition of the company’s international subsidiaries will be subject to the district court’s approval. Currently, Desktop Metal’s subsidiaries operate in Germany, Italy, and Japan and represent some of the company’s most recognized brands in binder jetting and DLP-based technologies.
Desktop Metal previously saw large investments with its office-friendly metal 3D printing systems. (Photo Credit: Desktop Metal)
This news follows recent reports of a contentious acquisition by Nano Dimension, which finalized its purchase of Desktop Metal earlier in the year following a court-ordered ruling. Nano Dimension stated that the decision to pursue bankruptcy was made independently by the board at Desktop Metal. Nano CEO Ofir Baharav emphasized that the move was about preserving financial feasibility and enabling the company to pursue new opportunities with minimal risk. In a comment on the filing, Baharav said, “We are safeguarding our financial stability and maintaining our status as the best-capitalized company in our ecosystem. This strong position allows us to pursue strategic opportunities with maximum leverage.”
Despite the complexity that follows the current legal and financial state of the company, the decision to file Chapter 11 signals a clear shift within the additive manufacturing landscape. Previously, Desktop Metal was hailed as a disruptor for its push toward mass production with metal binder jetting. In its high-profile SPAC merger back in 2020, the company was valued at nearly $2.5 billion USD and backed by a suite of acquisitions intended to consolidate the AM sector under one entity.
In 2021, Desktop Metal opened an in-house facility that helped triple its assembly capacity. (Photo Credit: Marc Bemsau)
Despite the company’s aggressive growth strategy, bolstered by its then acquisition of ExOne and EnvisionTEC, this eventually led to surmounting debts and difficult operational challenges. Some stock analysts had previously questioned the sustainability of the company’s business model, especially given recent inconsistencies with revenue. This follows broader economic headwinds that are affecting all areas of the tech sector.
Adding to the developing financial challenges, law firm Quinn Emanuel Urquhart & Sullivan LLP, which previously represented the company in litigation against Nano Dimension, stated that the company still has outstanding debts of nearly $30 million in legal fees. The firm recently updated these figures and is requesting up to $90 million in damages through a separate legal suit.
Desktop Metal’s market performance has declined gradually since its peak in 2021 following its listing in 2018. (Data Credit: NYSE)
While it is important to recognize that Desktop Metal’s core technologies have potential, the decision to file for bankruptcy and divestitures of its subsidiaries marks a dramatic turn for a company once poised to be the future of the 3D printing industry. As the industry as a whole now reacts to these developments, the fate of Desktop Metal’s assets and technologies remains closely watched.
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*Cover Photo Credits: NYSE, U.S Bankruptcy Court for the Southern District of Texas, NASDAQ