Stratasys and Objet Merge: Major Change in the Additive Manufacturing Landscape 

Today, publicly traded Stratasys, Inc. and privately held Objet Ltd, announced the approval of a merger agreement. Officials claim the transaction will position the combined company as a leader within the high-growth 3D printing and direct digital manufacturing industry.

Stratasys markets under the brands uPrint and Dimension 3D Printers and Fortus Production 3D Printers. The company also operates RedEye On Demand, a digital-manufacturing service for prototypes and production parts, and manufactures 3D printers for Hewlett Packard. Unique to Stratasys is the patented Fused Deposition Modeling (FDM®) process invented by visionary and CEO Scott Crump. The process creates functional prototypes and end-use parts direct from any 3D CAD program, using high-performance industrial thermoplastics such as; ABS, Polycarbonate, PPSF, PPSU and Ultem 9085.

 Objet markets inkjet-based 3D printing systems and materials. The Objet family of printers range in size from the desktop models suited for the office to the larger Eden and Connex suited for the production facility. Objet’s 3D printers feature PolyJet™ technology that simultaneously jets two materials from about 70 digital materials to print up to 14 different materials on a single part all at once. These materials range from rigid to rubber-like, transparent to opaque, and standard to ABS-grade engineering plastics.

 Under this new agreement, the combined company would:

• Be valued at approximately $1.4 billion
• Be well positioned with multiple technology platforms and complementary products available across enhanced integrated sales and marketing organization
• Retain the Stratasys name and operate under the name Stratasys Ltd. with dual headquarters in Eden Prairie, Minnesota and Rehovot, Israel

Buying Out the Competition

What do I think? My first thought is I wish I was a Stratasys employee with stock options. Aside from that, I’ve always been a big fan of the two companies and their unique differences. I am a little taken back by the merger announcement and am sad to see the “healthy” competition factor disappear as I believe competition is what drives innovation and is ultimately good for the marketplace and the economy. 

Rival 3D printing manufacturer, 3D Systems Corporation, has a track record of buying out the competition and has been doing so for the past few years. I don’t necessarily think that is good for business, but admire the strength and passion of 3D Systems as well. 3D Systems is headquartered in Rock Hill, South Carolina and listed on the NYSE as DDD. The stock was valued at $27.34 a share at the open of business on April 16, 2012 Stratasys stock was valued at $44.06 a share mid-day on April 16, 2012.

Stratasys is listed on the NASDAQ as SSYS. Under the merger agreement, the companies would combine in an all-stock transaction with a combined equity value of approximately $1.4 billion, based upon the closing price of Stratasys’ common stock on April 13, 2012.

I’m not sure the merger will really benefit either company. Both companies have highly effective marketing programs and well-established sales distribution channels. Both technologies are different than 3D Systems (maker of SLA® and SLS®) and in many ways superior. My sense is that both companies were doing just fine on their own -- successfully launched new systems and materials into the market place over the past five years. Many of the service bureaus I work with have both Objet and Stratasys equipment, not to mention Stratsys and EOS GmbH equipment too. I’m more interested to know how this merger will impact the dealers. Will Stratasys dealers now offer Objet equipment and will Objet dealers now offer Stratasys equipment? There is already healthy competition amongst the dealers in each region of the US who are under pressure to win sales.

Then again, this merger may not happen and even if it does, it may not last. Take for example, the formation of UK-based MTT Technologies Limited, an additive manufacturing equipment manufacturer which had English German ownership. The two companies eventual split to form SLM Solutions GmbH and MTT remained the same, only later to be acquired by Renishaw, Inc. – oh as the world turns for these 3D printing equipment manufacturers!

One thing I can say with certainty, Massachusetts, Minnesota and South Carolina are home to technology leaders in the 3D printing industry and it’s going to be exciting to see what they come up with next.

 For more information, visit www.stratasys.com or www.objet.com, or read the entire press release here: http://rapidproductdevelopment.biz/2012/04/16/stratasys-and-objet-agree-to-combine-to-create-a-leader-in-3d-printing-and-direct-digital-manufacturing

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About Nadra Angerman

Nadra Angerman, Angerman Communications Group, is the founding principal of the first marketing agency dedicated exclusively to promoting the 3D printing, rapid prototyping and additive manufacturing industries. Nadra has 20 years of marketing experience, more than half of which have been focused solely on the marketing of emerging technologies, engineering services and manufacturing capabilities. Nadra is a social networking enthusiast with a passion for business and economic development. For more information: www.rapidproductdevelopment.biz