MakerBot Acquired by Stratasys for $403 Million
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Another day, another tech merger. Admittedly, Brooklyn-based start-up MakerBot is the last company I thought would be involved in a merger. MakerBot agreed to sell itself to 3D printing rival Stratasys (NASDAQ: SSYS) in a deal valued at $403 million. This all-stock mega deal is just another example of how 3D printing or content-to-print has gone mainstream. MakerBot will become a subsidiary of Stratasys, keeping the existing MakerBot board and management team in place.
You can make it
MakerBot, started in 2009, helped to popularize 3D printing with engineers, designers and hobbyists worldwide. MakerBot generated $11.5 million in revenue in the booming 3D printing market in the first quarter of 2013. MakerBot's revenue in 2012 was $15.7 million — that is amazing growth for such a small company. This merger and acquisition deal is a great "get" for Stratasys and should spur growth for the entire content-to-print sector. This deal give MakerBot the money developed higher-quality hardware and software to gain market share and create a premium brand within Stratasys. Access to engineering and better resources such as marketing and distribution will help MakerBot printers become the "must have" devices for 3D printer aficionados.
We can make it
For Stratasys, this deal gives the company additional credibility within the content-to-print community and a massive presence in the consumer 3D print arena. But for this to work, Stratasys has to allow MakerBot to innovate. MakerBot has stiff competition from more than a few great companies capitalizing on consumer acceptance of 3D printing — acceptance that MakerBot created. This deal gives Stratasys the upper hand in the 3D printing space, but there are other companies who have vast potential in this current 3D print craze.
3D Systems (NYSE: DDD), the maker of Geomagic, has been beefing up its content-to-print offerings. 3D Systems has a nice entry level $1,299 Cube 3D Printer that will give the MakerBot Replicator 2X a run for its money. The 3D Systems 3D printer lineup is particularly strong, so Stratasys must not stifle the momentum and brand loyalty that MakerBot has built since its founding in 2009. 3D Systems has truly strong content-to-print devices for consumers, education and professionals, while Stratasys and MakerBot's product lines are not as deep.
Autodesk (NASDAQ: ADSK) may not have 3D printers, but it does have the software that is used by many who buy 3D printers. To ride this content-to-print wave, Autodesk must add more 3D print functionality to products like Maya and 3DS Max. The last thing that Autodesk wants is content creators getting too comfortable with the MakerBot and 3D Systems proprietary 3D-creation software packages. Autodesk has recently partnered with MakerBot and sees 3D printing as a potential boon for its software products. The company has tripled its San Francisco workforce to capitalize on the growing 3D print market. Autodesk senses that what laser printing did for Adobe, 3D printing has the potential to do for it.
To infinity and beyond
As content-to-print has gone from geeky tinkerers sourcing parts from eBay to consumers buying shiny new Cube 3D Printers at Staples, Wall Street and Main Street have taken notice and want in — in a big way. The content-to-print market is real. Might Formlabs get snapped up by 3D Systems? Who knows, but this space is hot, so look for more M&As in 2013. Right now there are no real "winners" or "losers" in the market, but Stratasys, 3D Systems and Autodesk currently have the inside track. Look for these firms to be aggressive in partnerships, acquisitions and product development as the content-to-print space grows.
John Moore has no position in any stocks mentioned. The Motley Fool recommends 3D Systems and Stratasys. The Motley Fool owns shares of 3D Systems and Stratasys and has the following options: Short Jan 2014 $36 Calls on 3D Systems and Short Jan 2014 $20 Puts on 3D Systems. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!