April 25, 2014

Proto Labs, Inc., announced Thursday that it has acquired FineLine Prototyping, a Raleigh, North Carolina based 3D printing services company for $38 million.

Headquartered in Maple Plain, Minnesota, Proto Labs produces prototypes out of metal and plastic using software and computer numerical control (CNC), machining and injection molding system. It can rapidly create the desired mold from a broad range of resins or metals.

FineLine offers stereolithography, selective laser sintering and direct metal laser sintering services to corporate customers and generated revenues of approximately $9.7 million in 2013. Proto Labs is buying FineLine for total consideration of $38 million and will continue to operate the FineLine facility out of Raleigh. FineLine founders Rob Connelly and Craig Goff will stay involved in the company and lead the global additive manufacturing services.

Proto Labs expects the acquisition of FineLine to be accretive to Proto Labs earnings per share by the fourth quarter of 2014.

Proto Labs had reportedly said in the past that it didn't plan to invest in 3D printing. Former Chief Executive Bradley Cleveland said in an interview with Reuters in 2013 that it was slow and unsuitable for commercial needs." Proto Labs claims to have the quickest turnaround in the business and can create thousands of parts in a few days.

However, with the growing popularity of 3D printing, the demand for providing 3D printing service is also increasing. In a statement Protolabs' new CEO Vicki Holt said, "Our customers have been asking us to provide additive manufacturing services for quite some time, and now we can address that need. We're accepting orders starting today."

Protolabs said additive manufacturing is "highly complementary" to its existing injection molding services and said 70% of Proto Labs customers also utilize an additive manufacturing service in their product development process.

"The acquisition of FineLine is consistent with Proto Labs' strategy to expand sales to product developers through envelope expansions and addition of new service offerings which reduce time, cost and waste in new product development," said Holt.

Proto Labs also announced that it has completed renovation of a 166,000-square-foot manufacturing plant at 2600 Niagara Lane in Plymouth and will begin operations at this location on Monday April 28.

This new building will initially house 175 employees, split evenly between office and manufacturing workers. Proto Labs plans to eventually expand that number to 300 employees by May, 2017. Proto Labs invested a total of $19 million to purchase the property and renovate the building.

Posted in 3D Printing Services

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