Stratasys (SSYS) purchases remaining stake in Xaar 3D and strengthens its portfolio – October 7, 2021
Stratasys (SSYS – Free Report) announced on Wednesday that it has acquired the outstanding stake in Cambridge, UK-based inkjet printing technology group Xaar 3D Ltd. However, the company did not disclose the financial terms of the transaction.
The acquisition of Xaar follows an agreement reached by the two companies in 2019. Under the agreement, Stratasys acquired a 45% stake in Xaar in 2019 and was granted an option to acquire the remaining stake at a later date. Stratasys cashed in its option to purchase the outstanding shares just after six months of launching the H350 3D printer based on Xaar’s Selective Absorption Fusion (SAF) technology.
SAF is a category of powder-based fusion 3D printing process that uses industrial grade technology to achieve higher levels of end-use part production. It uses infrared absorbing fluid to help fuse the polymer powder. The technology was invented by Neil Hopkinson at Loughborough University, England, and has been in development at Xaar 3D since 2017.
According to Stratasys, its SAF-based H-Series 3D printers are designed to deliver cost-competitive parts at the production level. The company believes that this technology is capable of meeting the demands of businesses in the automotive, commercial goods, consumer electronics and consumer goods industries.
Therefore, the integration of Xaar will further strengthen Stratasys’ capabilities in the market for mass production 3D printed polymer parts.
Lately, Stratasys has focused on improving its capabilities in the field of polymeric 3D printing. Against this backdrop, in February this year the company purchased RP Support (RPS), a UK supplier of stereolithography 3D printers and solutions. He estimates that the acquisition will be slightly accretive to its revenue and profits by the end of 2021.
Prior to that, in January, Stratasys completed the acquisition of Origin, a San Francisco-based 3D printing start-up. With this acquisition, Stratasys gained access to Origin One, Origin’s industrial-grade 3D printer, which uses its proprietary resin-based programmable light-curing (P3) technology.
The integration has enabled Stratasys to supply polymer-based additive systems to the dental, medical, tooling, and select industrial, defense and consumer goods markets. In addition, the acquisition of Origin One is expected to generate additional annual revenues of $ 200 million within five years. Additionally, the acquisition is expected to contribute to non-GAAP earnings growth by 2023, although it may have a dilutive effect on non-GAAP earnings in 2021.
We believe that Stratasys’ continued focus on expanding its 3D printing portfolio through acquisitions will drive customer acquisition for the company, thereby strengthening its near-term growth prospects.
Zacks rank and choice of keys
Stratasys currently wears a Zacks Rank # 3 (Hold).
Top ranked stocks in the broader tech sector include Microsoft (MSFT – Free report), STMicroelectronics SA (STM – Free report) and NVIDIA Corporation (NVDA – Free Report), all of which have a Zacks Rank of 2 (Buy), at the moment. You can see The full list of today’s Zacks # 1 Rank (Strong Buy) stocks here.
The long-term profit growth rate for Microsoft, STMicroelectronics and NVIDIA is currently set at 11.1%, 5% and 19.5%, respectively.