The business world of additive manufacturing (AM) is still taking shape. The technology is still new enough that market leaders haven’t quite yet managed the level of global saturation as older tech companies, such as Apple or Microsoft. Part of the process of market maturation is acquisitions.
Stratasys has announced the acquisition of Solid Concepts and Harvest Technologies. Both companies are AM service bureaus, with Solid Concepts having a global presences and Harvest Technologies as mainly an US entity. Both companies will assist Stratasys with future growth, and provide additional resources for its in-house service bureau, RedEye.
Stratasys will acquire Solid Concepts for total consideration of up to$295 million, including a payment on closing of $172 million (or, if settled in cash, part on closing and part six months after closing), deferred payments of$60 million and up to $63 million in retention-related payments. Harvest Technologies was acquired for an undisclosed amount, including retention-related payments, payable in cash, shares or a combination.
“We are pleased to announce these strategic transactions, which will enable us to provide customers with a comprehensive offering that addresses a broad spectrum of additive manufacturing solutions,” said Stratasys CEO David Reis. “With Solid Concepts and Harvest Technologies, together with RedEye, we expect to create a strategic platform to meet our customers’ additive manufacturing requirements by significantly expanding our offering, targeting new applications, and strengthening our customer relationships. Solid Concepts and Harvest Technologies are industry pioneers and innovators in the additive manufacturing space.”
Solid Concepts was founded in 1991 and has six U.S. facilities staffed by approximately 450 employees. It provides AM services to a number of industries, including medical, aerospace, and industrial, among others. The company generated revenues of approximately $65 million in 2013.
Based in Texas, Harvest Technologies is a specialty additive manufacturing service bureau established in 1995, with approximately 80 employees. The company focuses on advanced end use parts applications and was the first AM company inNorth America to become AS9100/ISO 9001 certified.
Rapid Ready reached out to Todd Grimm of T.A. Grimm & Associates, about the acquisition and he had this to say:
The acquisitions were a bit of a surprise. I considered Solid Concepts and Harvest two that planned to stay independent, knowing how many companies have knocked on their doors inquiring about a purchase. Listening to Stratasys’ investors call, my two take-a-ways were 1) AM users need access multiple technologies (more than 1 or 2) 2) AM technology requires expertise that users may not be prepared to invest in. Both of these support my on-going position that companies need to consider implementing AM, but will need to continue to use service bureaus. Overall, I think this will be a good thing for all parties.
Stratasys isn’t shy about acquisitions, though it doesn’t pick up companies at quite the rate of 3D Systems, which just this morning announced its latest acquisition: Medical Modeling Inc. In June of last year, Stratasys acquired MakerBot, one of the leading desktop printer companies in the US. While not an acquisition per se, in 2012, Stratasys strengthened its market position by merging with Objet and retaining the Stratasys name.