), a 3D printing company, has entered into a merger agreement
with a desktop 3D printing company MakerBot Industries LLC. As
per the terms of the agreement, Makerbot will merge with a
subsidiary of Stratasys in a stock-for-stock transaction.
The merger brings together two industry leaders and their 3D
printing technology. The combined resources should result in
improved products, which should help adoption.
Since desktop 3D printers are gradually gaining popularity,
Stratasys should see demand increasing in the coming
MakerBot came into existence in 2009 and played a significant
role in the development of the 3D market. The company sold nearly
22,000 3D printers in 2009 and around 11,000 MakerBot Replicator
2 Desktop 3D printers in the last nine months. The share price of
Stratasys surged 2.84% after trading hours.
MakerBot's client base constitutes primarily of designers and
engineers trained in CAD. The merger will provide MakerBot the
world class infrastructure that it was looking for and would help
it grow leveraging Stratasys' infrastructure. We therefore,
believe this is a natural progression for MakerBot.
Stratasys has taken the acquisition route to augment its 3D
printing business. The companypreviously merged its operation
with Objet Ltd. valuing the joint entity at $1.4 billion. The
merged entity has further strengthened the company's position in
the growing 3D printing space. Prior to that, the company
acquired Solidscape, Inc. for $38.0 million plus certain purchase
price adjustments. New Hampshire-based Solidscape also helped
Stratasys to strengthen its 3D printing capabilities.
The 3D printing business is particularly attractive for
Stratasys because of rival
) decision to quit the market, as digital printing formed only a
trivial part of its business portfolio. Again, the company is
also witnessing an upward trend in direct digital marketing
On the other hand, the company is apprehensive about its
high-cost business model and stiff competition from big and small
3D Systems Corp.
). Nonetheless, the acquisition of MakerBot is expected to
improve the growth of its 3D systems business.
The company has a Zacks Rank #3 (Hold). Investors can also
consider other companies in the technology space, such as
Western Digital Corp.
), which has a Zacks Rank #2 (Buy).
3D SYSTEMS CORP (DDD): Free Stock Analysis
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