Stratasys and Objet plan to merge, create leader in 3D printing

In April 2012, Stratasys and Objet announced plans to merge in an all-stock transaction that would result in a combined company valued at $1.4 billion. The deal, if approved, will create a leader in the small but fast growing market for 3D printers and production systems. The combined company — which will continue to operate as Stratasys Ltd. — brings together two successful companies in the field, each with a distinct product offering and customer base. Together, the two companies are convinced they can do more than benefit from the usual product development, sales and marketing, and operational synergies inherent in most mergers. The ultimate goal is to bring 3D printing into the mainstream.

Stratasys caters to a highly technical customer base comprised of mostly larger manufacturers, while Objet serves makers of smaller goods. While Stratasys’ customers come from fields like aerospace, automotive, medical, and the military, clients of Objet are found in the animation, consumer goods, jewelry, sporting goods, and toy industries. There is some overlap, but overall the two organizations offer products and sales channels that complement each other well.

The 3D printing and direct digital manufacturing (DDM) markets are poised to explode. Using a process where a machine takes a digital file and turns it into a finished physical object by building it layer by layer,  the possibilities for rapid prototyping and low-volume manufacturing are endless. In the medical field, for example, dental implants and prosthetics are already benefiting from the technology, which can be used to create nearly instantaneous products that fit the individual precisely. There is even a company called Shapeways that lets people upload a 3D design, choose from different materials, and have the product manufactured, or printed, on the spot.

For Stratasys and Objet, the question will be whether the merger will give the company the ability to combine their respective technical prowess and come up with a more compact and less complicated 3D printer that will catch the eye of the consumer. With competitors that range from 3D Systems (inventor of 3D printing technology) to CAD/CAM software developers and startups like Makerbot (maker of the first 3D printer priced below $2,000), the challenge for the new Stratasys may not be dealing with merger integrations and synergies. It may be staying one step ahead of the 3D puppy-bot barking at its heels.

Lesley Epperson

Lesley Epperson covers the semiconductor and electronic component industries for Hoover's. After all those chips, she often needs to engage in a less esoteric pursuit: hunting down the perfect margarita.

Read more articles by Lesley Epperson.

Leave a Comment