), a 3D printing company, is set to raise $418.5 million by
selling 4.5 million of its common shares at a price of $93.0 per
share. Its share price fell 5.6% following the announcement,
resulting in a market cap of $3.6 billion. It expected net
proceeds of $402.2 million from the offering. Shareholders most
likely didn't appreciate the earnings dilution, sending prices
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) will be the sole book-running manager while Piper Jaffray,
Morgan Stanley, BofA Merrill Lynch, and Needham & Company
will act as co-managers for the proposed offering. The
underwriters have a 30-day option to purchase an additional
675,000 of ordinary shares of the company.
The current capital raising initiative comes at an opportune time
as the company has been performing well over the past few
quarters. Stratasys also stated that the secondary offering will
boost its cash reserves to over $500 million. Stratasys had
$148.9 million in the form of cash and cash equivalents as of Jun
30, up from $65.5 million in the previous quarter.
Stratasys will use the proceeds for business purposes, including
acquisitions, capital expenses and working capital. A
registration statement and a preliminary prospectus supplement
related to the offering have been filed with the Securities and
Exchange Commission (SEC) and the final prospectus supplement
will be filed soon.
Earlier, the company bought 3D printing company MakerBot
Industries LLC for a stock deal worth $403 million. The
acquisition brings together two industry leaders with advanced 3D
printing technology. The combined resources will also result in
improved offerings, which could lead to an increase in product
Additionally, the second-quarter results were encouraging with
adjusted earnings per share and revenues improving on a
year-over-year basis. Its Product and Services revenues also
However, we are a little concerned, as the company has not been
doing very well in the European region. Moreover, Stratasys'
continuous investments (acquisitions, integration activities and
cross-selling initiatives) led to higher operating expenses and
eventually to an operating loss.
Currently, Stratasys has a Zacks Rank #3 (Hold). Other stocks
Electronic For Imaging Inc
Alps Electric Co. Ltd.
), with a Zacks Rank #1 (Strong Buy) and Zacks Rank #2 (Buy),
respectively are also worth considering.