Stratasys Closes Solid Concepts Deal, Boosts AM Offerings - Analyst Blog


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Stratasys Ltd. ( SSYS ) has completed the acquisition of Solid Concepts and the Harvest Technologies buyout and is expected to be closed by the end of this month. Stratasys inked a deal to acquire the two privately-held companies on Apr 2, 2014. The company has agreed to pay $295 million for the Solid Concepts acquisition, while financial details of the Harvest deal were not available.

Solid Concepts, founded in 1991, offers an array of additive manufacturing (AM) solutions, which are used by companies in the automotive, aerospace, electronics, consumer goods and other sectors to improve product designs.

On the other hand, Belton-based Harvest Technologies provides manufacturing process technology and focuses more on end-use parts for several enterprises. These acquisitions will help Stratasys to evolve as a leader in the 3D industrial printing and manufacturing industry and position it for growth in the 3D printing space.

Moreover, Stratasys will integrate Solid Concepts and Harvest Technologies with RedEye, its digital manufacturing business, to form a single AM services business unit.

Apart from these, Stratasys also acquired certain assets of Interfacial Solutions, a production partner of Stratasys' Fused Deposition Modeling (FDM) platform. We believe that the acquisition will also expand and enhance Stratasys' 3D Printing Platform. Moreover, this acquisition will enable Stratasys to attract new clients and strengthen its overall market position.

Nonetheless, investments to boost growth are expected to impact the company's results in the near term. Management expects operating expenses related to sales & marketing and research & development to increase in 2014 which will impact operating margins in 2014. Moreover, Stratasys is concerned about its high-cost business model and competition from the likes of 3D Systems Corp. ( DDD ), The ExOne Company ( XONE ) and Voxeljet ( VJET ).

Stratasys has a Zacks Rank #4 (Sell).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
Referenced Stocks: AM , FDM , SSYS , DDD , VJET

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