Stratasys and Desktop Metal – behind the scenes of the merger, joint development strategy and plans for the future

Last Wednesday – May 24, 2023, the largest transaction in the history of the global 3D printing industry took place – the merger of Stratasys with Desktop Metal. The first of the companies is the undisputed industry leader, with the highest revenues for several years and improving its financial results and business profitability from quarter to quarter. The second is one of the most dynamically developing startups, specializing in 3D printing technology from powdered metals, which also has polymer technologies or other related manufacturing methods in its portfolio. The transaction worth over USD 1.8 billion has a chance to become a breakthrough for the entire additive manufacturing industry, largely due to the fact that both companies have jointly created the largest and currently unsurpassed “3D corporation”.

The day after the official announcement of the transaction, the CEOs of Stratasys – Yoav Zeif and Desktop Metal – Ric Fulop, took part in a teleconference for investors of the merging companies, where they talked about its background, development strategy and joint plans for the future. Here is the most important information they provided…

CONVERSATIONS ABOUT THE LINKS OF THE BOTH COMPANIES HAVE LASTED FOR A YEAR

Closing the terms of such a large transaction was not easy, so the fact that talks on this subject have been going on for some time should not come as a surprise to anyone. It is worth recalling here that Stratasys was one of the first shareholders of Desktop Metal – several years before the company debuted on the American stock exchange. At the same time, Yoav Zeif did not hide that Stratasys will be looking for non-organic development opportunities for the company and its offer.

SINCE THE BEGINNING OF THE TERM, ZEIF STRIVED TO MAKE STRATASYS OFFER METAL 3D PRINTING

In December 2019, before Yoav Zeif took over as CEO of Stratasys, the company announced its intention to launch solutions based on Layered Powder Metallurgy technology. Interviews began to be given about these solutions, boasting about the speed, quality and accuracy with which parts were to be produced, but gradually the talk began to wane … In the following years, Stratasys focused on polymers, acquiring companies such as RPS, Origin, Xaar 3D and Covestro AM. However, Zeif kept thinking about returning to metal 3D printing.

“I don’t do anything on the spur of the moment,” Zeif told investors. “Everything is part of the strategy here. When I started (…) we wanted to remain a leading player in the field of polymers and then go back to considering metal.”

The company began exploring Binder Jetting technology to produce production-quality parts. After obtaining approval of this type of development direction from selected clients, talks with Desktop Metal’s management began.

MATERIALS WILL BE KEY

Zeif and Ric Fulop highlighted their combined material capabilities, particularly in the field of polymers. By combining the offer of Covestro AM acquired by Stratasys and Adaptive 3D acquired by Desktop Metal, users of DLP, PolyJet and SLA 3D printers can receive many new solutions in the field of light-curing resins. “We have highly diverse innovations in materials science,” Fulop noted. “This imparts a highly complementary capability that will make our customers more successful in mass production.” “We are supplying more materials all the time and this is the only way to finance innovation and stay profitable,” added Zeif.

THE NEW, COMBINED COMPANY IS TO BE A PLATFORM FOR FURTHER ACQUISITIONS

Ric Fulop said, “Scale is key to achieving profitability. We have a vision of how this industry will develop. We want to build the company through organic growth, but we will also look for inorganic opportunities.” Zeif added – “We have experience, we have acquired five companies in recent years, but now we are focusing on integration and exploiting synergies.”

STRATASYS AND DESKTOP METAL BELIEVE THAT THEY ARE TRANSFORMING NOT ONLY THEIR BUSINESS BUT ALSO THE ENTIRE INDUSTRY

The CEO of Stratasys is convinced that what has just happened is a milestone in the development of the 3D printing industry – “We are rebuilding the industry. I’ve been here for three and a half years and struggle with the position of 3D printing in the world. We’re one of the only profitable companies in the industry, so something’s not right. We ask ourselves, how can we solve this?”

The answer, the companies say, is to merge and take the lead in bringing 3D printing into manufacturing.

“I am excited about the technical synergy,” said Fulop. “This merger will accelerate innovation. We have the materials to push PolyJet into mass production. We have synergies in terms of software and market entry. We have 7,000 customers who will be introduced to a distribution network much larger than ours. It’s a fantastic combination. I can’t imagine a better partnership.”

Source: www.nextgenerationam.com & www.tctmagazine.com