Jun.21, 2013

The merger of Stratasys and MakerBot brings together two industry leaders and their 3D printing technology. On Thursday's press conference at MakerBot HQ in Brooklyn, Stratasys, Makerbot CEOs talked more about the deal and what it means for their companies.

"Desktop 3-D printers have evolved into systems appealing to professionals and nonprofessional users across a wide range of industries and applications," said Stratasys CEO David Reis. "We're not merging with just a printer; we're merging with a brand, and a total ecosystem solution."

While Stratasys builds professional 3D printers for industrial use, MakerBot focuses on smaller and cheaper entry-level 3D models for consumers. "MakerBot has major customers in organizations like General Electric Co., the National Aeronautics and Space Administration, and Lockheed Martin Corp. and it will continue to sell its desktop 3-D printers to other major Fortune 500 companies, as well as small entrepreneurial startups and individuals." said Reis.

Bobby Burleson, a Canaccord Genuity analyst wrote in a Wednesday report that the acquisition was partly a defensive move. MakerBot's low-end market strategy "posed a potential threat to Stratasys' entry-level system sales and its materials pricing," he said.

Both company said the deal will allow them to cut costs and further tap international markets. Stratasys also unveiled plans to add at least 80 jobs by the end of the year.

Makerbot had $15.7 million in sales for 2012. During the first quarter of 2013, MakerBot generated $11.5 million in revenue and has sold more about 22,000 3-D printers since its founding in early 2009.

"Based on industry data, we estimate that MakerBot had more than 20% market share in the personal 3-D printing market in 2011 and expanded market share in 2012," analyst Brian Drab of William Blair & Co. LLC wrote in a note Thursday. "The purchase price represents 38 times 2012 sales and forward multiple of 13.1 times expected 2013 sales."

The proposed merger has an initial value of $403 million and it could grow to include an additional $201 million worth of stock based on MakerBot's performance.

According to Reis, Stratasys is expecting revenue of more than $400 million this year.

The deal will enable Stratasys sell 3-D printers priced from $2,200 to around $600,000. Reis described Stratasys as "a large supermarket of technologies, and now MakerBot will be able to walk into the supermarket of Stratasys and pick the elements of our infrastructure and technology which MakerBot believes will accelerate its growth."

"We have the ability to benefit from Stratasys' processes, intellectual property, technical expertise, R&D investment and global reach," MakerBot COO Bre Pettis added on the call.



Posted in 3D Printing Company



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