Desktop Metal Acquired by Industry Giant Stratasys
In a surprising turn of events, Stratasys Ltd. (Nasdaq: SSYS), a well-established player in the additive manufacturing industry, has announced its acquisition of Desktop Metal, Inc. (NYSE: DM), a leading tech company specializing in the design and manufacturing of metal 3D printers. This all-stock transaction, valued at approximately $1.8 billion, comes just hours after news of their potential deal surfaced, leaving investors and industry enthusiasts (us included) in awe.
Since I am an investor in $DM, I am very interested in learning about this deal, and what better way to do it than by writing about it?
Desktop Metal has gained significant recognition for its innovative metal 3D printing technology, enabling the production of complex metal parts with exceptional precision. By combining the polymer strengths of Stratasys with Desktop Metal's renowned expertise in industrial mass production, this strategic merger aims to create a powerhouse in the additive manufacturing sector. The newly formed company is expected to be at the forefront of meeting the evolving needs of customers in the manufacturing industry.
Stratasys, an Israel-based company, has dominated the additive manufacturing space for over three decades. Their extensive product portfolio includes 3D printers, software solutions, and materials tailored for polymer-based manufacturing processes. Additionally, Stratasys offers on-demand 3D printing services catering to the diverse requirements of businesses across multiple sectors.
"Stratasys Ltd. (Nasdaq: SSYS) ("Stratasys") and Desktop Metal, Inc. (NYSE: DM) ("Desktop Metal") today announced that they have entered into a definitive agreement whereby the companies will combine in an all-stock transaction valued at approximately $1.8 billion. The transaction unites the polymer strengths of Stratasys with the complementary industrial mass production leadership of Desktop Metal's brands, creating an additive manufacturing company that is expected to be well-positioned to serve the evolving needs of customers in manufacturing." Quote from the official press release of Desktop Metal
This groundbreaking acquisition positions Stratasys as a frontrunner in the additive manufacturing landscape, bolstering its polymer and metal-based 3D printing capabilities. By leveraging the synergies between the two companies, Stratasys aims to revolutionize the manufacturing industry by offering comprehensive solutions encompassing a broad spectrum of materials and printing technologies.
As the demand for 3D printing continues to soar, this strategic move by Stratasys showcases the company's commitment to staying ahead of the curve and catering to the ever-evolving needs of its customers. The combined expertise of Stratasys and Desktop Metal is set to unlock new possibilities in manufacturing, empowering businesses to unlock greater efficiency, cost-effectiveness, and design freedom through advanced additive manufacturing technologies.
This move is a good one from Desktop Metal's point of view. It became clear that the company needed some help structurally. Stratasys was an early investor in Desktop Metal going back to 2015, so it is clear that the Israeli company believes in Desktop Metal's product which is always positive. There has been some early pushback from those within the additive manufacturing space, already fearing that Stratasys will stifle DM's growth and products. Those claims are not unwarranted. You never want to see smaller and more innovative companies get snapped up by larger ones with more immediate capital and lose their personality in the process.
That said, I hope this acquisition is a mutually beneficial one. The metal 3D printing space is so interesting to learn about and pushes the boundaries on what is possible with the technology.
