Nano Dimension acquires 12% of Stratasys…

Nano Dimensions is one of those companies in the 3D printing industry that is written and talked about a lot, but its offer is so specific and specialized that its products are used by a relatively narrow audience. The company from Israel produces specialized machines for additive manufacturing of electronics at the nano-technological level, which are to ultimately “change the face” of the electronic market. This promise sounds very attractive, but at the moment it is still a very niche solution. This makes today’s news even more surprising that Nano Dimension – a company you’ve probably never heard of, took over 12% of Stratasys – one of the two largest companies in the world of 3D printing in terms of revenues.

Explaining people familiar with the additive manufacturing market what Stratasys is is like explaining to automotive fans what Ford or Mercedes is. The creator of FDM and PolyJet technologies (developed by Objet, which has been part of it for a decade), in 2020 and 2021 achieved annual revenues of $ 521 million and $ 607 million, respectively. The only company that can match it with such revenues is 3D Systems – the company that invented 3D printing in general. The current Stratasys offer includes virtually all the most important additive methods except for 3D printing from metal powders, making it the undisputed market leader. Recently, Stratasys has done another remarkable thing by merging two of the leading desktop 3D printer manufacturers – MakerBot and Ultimaker, and acquiring 45.6% of the newly formed entity.

On the other hand, Nano Dimension presents itself as a pioneer in the development of advanced 3D printing of electronics. The company’s activity focuses on combining nano-technological conductive paths and 3D printing. The synergy of these technologies is expected to allow super-fast prototyping of complex printed circuits. At the same time, the company is gradually expanding its portfolio through acquisitions of other companies:

• in November 2021, it took over Essemtec – specializing in the assembly of electronic components on PCBs
• in January 2022, it took over Global Inkjet Systems – a manufacturer of 2D and 3D inkjet printing equipment, whose products are used, among others, by Fujifilm Dimatix, Konica Minolta, Kyocera, Ricoh, SII Printek, Toshiba TEC and Xaar
• in July 2022 (a week ago!) it took over Admatec and Formatec – companies printing in 3D from ceramics and metal.

You think that someone who invests so much in acquisitions must be big? When it comes to Nano Dimension, certainly not in terms of revenues… In 2020, the Israeli company generated revenues of USD 3.4 million, and in 2021 – USD 10.5 million. In total, in the last three years, the total revenue amounted to $ 21 million. In each of these years, the company recorded a loss: in 2019 – $ 14.8 million, in 2020 – $ 35.7 million, and last year… – $ 223.3 million (with the total loss attributable to non-controlling interests was – $ 69 million). Last year, sales and marketing costs alone amounted to twice as much as sales revenue (source: p. 96).

And despite all this, Nano Dimension takes over 12% of Stratasys, not the other way around …
This is what Yoav Stern, President and CEO of Nano Dimension comments on:

The goal of Nano Dimension when buying Stratasys stock is to create a strategic investment in a market leader that is well established in a relatively experienced (player) while Nano Dimension creates breakthrough technology in AME and 3D metal printing providing its shareholders with the value created by accelerated growth curves and expansion. Accordingly, investors in Nano Dimension will benefit from value creation in the blue ocean AM sectors and from the strategic advantage of investing in Stratasys, which enjoys a dominant presence in large, stable, more mature, mostly polymer-based AM technologies.

(…)

Incidentally, we can increase or decrease our investments in Stratasys, depending on market conditions and other economic factors, keeping them within the framework and environment that will evolve from the description above.

Increasing the company’s value by acquiring other companies is a strategy that has been developed for some time by Desktop Metal – a company that was recently valued on the US stock exchange at $ 3 billion, and now around 1 billion (-2 billion dollars of value decrease in less than one and a half year). How effective will this strategy prove to be in a few to several dozen months? So far, as of the day of writing this article, the value of one Stratasys share was $ 19.21, and the Nano Dimension was $ 3.18…

Source: www.nano-di.com