We’ve already commented on industry consolidation in general. So, what do we think of the Stratasys/Objet merger? First we’ll list the (publicly-available) particulars of the deal; then we’ll tell you what we think.
- Stratasys Inc. (a Minnesota-based 3D printer manufacturer) and Objet Ltd. (an Israel-based company in the same line of business) will merge to become Stratasys Ltd.
- Objet CEO David Reis will become CEO of Stratasys Ltd.
- Stratasys Inc. CEO Scott Crump will become Stratasys Ltd. chairman
- Transaction close date: Q3 2012
- Estimated post-merger value: $1.4B
- Major Goals: Global domination of the 3D printer manufacturer space; combined sales and marketing teams will create a pool of 260 resellers and selling agents stationed around the world; statements also hinted at the possibility of vertical integration
- David Reis Verbatim: “This transaction creates an organization that will provide a broad range of rapid prototyping and direct digital manufacturing applications to our customers, and the ability to bring exciting new products to the market.”
- Scott Crump Verbatim: “Together, we will have a broader and more comprehensive product and technology portfolio, and the resources, team and financial strength to achieve our goals.”
What We Think
- The combined customer list alone speaks of just what a powerhouse this Stratasys Ltd will be: Caterpillar, Xerox Corp, Honeywell International Inc, Adidas, Intel Corp, 3M Co, Jaguar, Bentley, Mercedes, Chrysler Group LLC, Apple Inc, Autodesk Inc. add major credibility to the deal.
- Though the merger is clearly a domination play, the horizontal nature of the integration will have fewer overall industry impacts than would have been seen in a vertically-integrated merger. In other words, Stratasys is currently queued up to become HP, not Apple.
- Intended domination may well be achieved given natural geographic diversity (Minnesota, USA vs. Rehovot, Israel) that truly expands the pie for both companies
- Speaking of USA vs. Israel…let’s hope culture clash doesn’t come into play. Both are global companies, but let’s be honest—there are no direct flights from Minneapolis to Tel Aviv…
That’s our $0.02. What’s yours?