Divergent clears its ownership structure of Asian shareholders to win new defense contracts in the US
Apollo Future Mobility was forced to sell its shares in the American company
Divergent Technologies, a U.S. company specializing in the use of additive manufacturing and advanced automation to produce lightweight and durable structures for the automotive industry (including car frames), is expanding its operations to include defense applications.
However, in order to collaborate with the U.S. defense industry, the company had to "remove" one of its key shareholders—Hong Kong-based Apollo Future Mobility. This is the cost of pursuing military projects in today's politically tense times.
Divergent Technologies is the creator of DAPS (Divergent Adaptive Production System), a comprehensive system that uses AI-driven generative design software for designing structures, new materials, and additive manufacturing to create large applications consisting of multiple parts. Products created using DAPS feature better performance, lower production costs, the ability for rapid customization, faster market entry, and on-demand scalability for mass production.
One of Divergent's shareholders was Hong Kong-based Apollo Future Mobility, an electric vehicle manufacturer. Apollo invested in Divergent with the intention of using DAPS technology in the production of its own vehicles. Unfortunately, as Divergent's involvement in U.S. defense projects increased, Apollo was forced to sell its shares in Divergent.
According to 3DPrint.com, on July 26, 2024, Apollo and its subsidiary Global 3D agreed to sell 4.93 million shares of Divergent Technologies to Lateralus Holdings IV, LLC. The total value of this sale, representing approximately 12.87% of Divergent's issued shares, amounted to $101.53 million (about 793 million HKD).
As part of the sale agreement, Apollo's designated directors on Divergent Technologies' board resigned with immediate effect. This ensures that Apollo no longer has direct influence over the company's management, in line with U.S. regulatory requirements, and opens the door for Divergent to pursue sensitive defense contracts without complications related to foreign ownership.
Divergent Technologies had sought certification from the U.S. Defense Counterintelligence and Security Agency, which is necessary to obtain classified defense contracts. The presence of a Hong Kong entity in the company’s structure was a significant barrier, given the tense situation between Hong Kong and China, as well as between China and the U.S.
At the same time, the United States has always ensured that its defense technologies remain under strict control.
Vanesa Listek, the editor at 3DPrint.com, suggests that this may not be the end of ownership changes at Divergent. Another investor, Horizons Ventures, is also based in Hong Kong and is backed by billionaire Li Ka-shing. According to Listek, as U.S. regulations tighten, Horizons Ventures may also be forced to sell its shares.
For Divergent, selling shares to an American entity opens the door to securing more defense contracts without the challenges associated with foreign ownership. The company is already collaborating with six major U.S. government contractors, including General Atomics Aeronautical Systems.
Source: www.3dprint.com