A number of acquisitions and mergers in the additive manufacturing industry – some of which are significant – are already setting the tone for 2021. This month alone, Stratasys announced the acquisition of photopolymer 3D printing company Origin, Desktop Metal announced its plan to purchase EnvisionTEC, and Protolabs recently announced the acquisition of 3D Hubs, creating the world’s largest digital manufacturing network. The question arises of who is next.
Before we speculate, however, let’s take a look at the recent trend that we’ve seen in a broader context. Acquisitions and mergers are nothing new in additive manufacturing. The initial boom in the industry was heavily influenced by mergers. Of course, there was the merger of Stratasys and Objet in 2012, which brought two leading companies together to form a 3D printing giant – still among the leading providers of polymer 3D printing today. At the same time, 3D Systems built a reputation for absorbing promising 3D printing companies like Z Corp., Vidar Systems, and many others. In particular, Stratasys acquired MakerBot in 2013 (for over USD 600 million), thereby deepening its role in the consumer AM space.
Mergers during this period, led primarily by Stratasys and 3D Systems, were largely driven by the promise of 3D printing to consumers. Today we have a clearer picture of the potential of AM for consumers: far more limited than the industry thought 10 years ago. With hindsight, it’s easy to see that the 3D printing industry may not have been mature enough for such a consolidation back then.
In 2021, the industry is in a very different place: the real potential of AM now lies in industrial manufacturing. The industry is no longer inspired by the idea of a “3D printer in every household”: Companies deliver reliable industrial-grade machines and materials that streamline production and create new manufacturing opportunities in areas such as aerospace, automotive, energy and healthcare .
The question now is whether the AM industry is finally ready to consolidate. Recent moves by the big AM players suggest that this may be the case. Let’s take a look at the recent acquisitions that could usher in a new, production-driven era for AM.
Stratasys and origins
Origin 3D printed nose swab for Henkel
Looking ahead to the key acquisitions of 2021, we have the Stratasys acquisition of Origin (completed in the first few days of the year). The companies announced the deal in December 2020 in a transaction of up to $ 100 million including cash and stocks. The impetus for the acquisition is mass production. In short, Stratasys plans to leverage Origin’s photopolymer 3D printing platform – Programmable PhotoPolymerization (P3) – to accelerate the mass production of parts.
Crucially, adding the Origin platform to its portfolio will strengthen Stratasys’s leading position in polymer AM, particularly with regard to manufacturing applications in industries such as consumer goods, dental, medical and tooling. From a financial perspective, Stratasys expects the acquisition to generate additional annual revenue of up to $ 200 million over the next five years.
Desktop Metal and EnvisionTEC
Less than two weeks after Stratasys completed its acquisition of Origin, Desktop Metal announced its intention to purchase 3D printing giant EnvisionTEC for photopolymer. The transaction, which is expected to close in the first quarter of 2021, is valued at $ 300 million and consists of cash and newly issued Desktop Metal stock. Once the deal is closed, EnvisionTEC will operate as a wholly owned subsidiary of Desktop Metal.
This deal is admittedly more of a surprise than Stratasys’s purchase of Origin, as both are in the polymer AM space. Conversely, Desktop Metal and EnvisionTEC are in completely different market areas. Desktop Metal focuses on metal, while EnvisionTEC has long been a leader in DLP-based photopolymerization technology.
As Davide pointed out in his coverage of the deal, there’s something to be said that Desktop Metal was recently listed on the stock exchange via an acquisition. This could possibly indicate that Desktop Metal’s acquisition of EnvisionTEC could be an opportunity for EnvisionTEC (with its much higher revenue) to join the exchange. The acquisition also enables Desktop Metal to immediately expand its global distribution network and capitalize on EnvisionTEC’s well-established position in the global industry. With EnvisionTEC as a subsidiary, Desktop Metal should have a network in 68 countries.
Protolabs and 3D Hubs
Earlier this week, rapid manufacturing giant Protolabs announced that it had reached a definitive agreement Purchase 3D hubs, another major online manufacturing platform, for $ 280 million. Once the deal is closed, Protolabs will have the largest digital manufacturing platform for custom parts.
3D Hubs, which itself has undergone a major change in recent years (from peer-to-peer to professional manufacturing platform), has a global network consisting of around 240 premium manufacturing partners. With the acquisition, Protolabs will gain these partners and significantly expand its production capacities. Rob Bodor, Protolabs’ current VP and GM of the Americas and new President and Chief Executive Officer, said of the deal, “Our combined organizations will provide the market with an industry-leading digital manufacturing solution that meets their needs from idea to prototype to end-user parts manufacturing meets complete fulfillment. Together we can meet almost all customer-specific manufacturing requirements over the entire product life cycle. “
Player on the move
The variety of these three recent acquisitions – Polymer Stratasys and Origin, Desktop Metal and EnvisionTEC, which are building a broader global footprint, and Protolabs and 3D Hubs on the service side – shows that this new phase of industry consolidation is not being driven by a single one specific area. All along the line we see how companies come together to strengthen their offerings and to present convincing solutions for industrial AM production.
Of course, the three deals mentioned above aren’t the only ones that indicate market maturity. A number of other high profile acquisitions in recent years have played a role. We can look at GE’s acquisition of metal AM innovator Arcam in 2016, which at the time demonstrated the multinational’s interest and investment in metal 3D printing it paid off enormously. More recently, material giant BASF has taken over the AM service provider SculpteoThis enables BASF to bring new AM materials to market and improve access to their 3D printing solutions and services. By and large, it shows that BASF is committed to growing its AM business.
On the materials side, the polymer materials company Covestro also acquired the Resins & Functional Materials (RFM) business from Royal DSM, which also includes DSM Additive Manufacturing. With this merger, announced in October 2020, Covestro will occupy a more important position in the AM materials market. (It’s worth noting that Royal DSM acquired part of Clariant’s 3D printing portfolio prior to the acquisition.) In Europe, the industrial AM service market has consolidated considerably since the merger of BEAMIT and ZARE. The companies announced in August 2020 that they were pooling their resources to create a single, high-performance AM service for the European market. Given Sandvik’s 30% stake in BEAMIT, the now much larger AM service is certainly on display.
All in all, the additive manufacturing industry is in the midst of exciting change that will see changing dynamics and, as we expect, new levels of growth. We’re also very interested in seeing what other acquisitions will take shape this year – will we be looking at a much smaller industry (in terms of individual companies) by the end of the year?