The Impact of a Desktop Metal/Stratasys Merger

by Terry Wohlers and Clare Scott

On May 25, 2023, Desktop Metal and Stratasys announced a proposed merger that would form the largest additive manufacturing company in the world. The transaction is valued at $1.8 billion, with the deal expected to close in Q4 2023. A merger has the potential to create a more competitive entity. Together, the two companies offer eight different AM processes that involve metal, polymer, composites, ceramic, wood, and sand. Add to the mix interest from Nano Dimension and 3D Systems in acquiring Stratasys.

What would a merger mean for Desktop Metal and Stratasys, as well as the overall AM industry? It may give Stratasys increased stature, thanks to brand recognition and the size of the new company. Stratasys also benefits from Desktop Metal’s hundreds of dental- and metal-related patents, bringing the former’s intellectual property portfolio to a total of 3,400 granted and pending patents. Desktop Metal, meanwhile, is likely to see a sales boost from Stratasys’ strong distribution channel. This could also expand the AM industry in overall revenue.

Such a merger does not come without risk. Challenges are merging the multitude of company departments, including IT, accounting, sales, marketing, and executive management. According to Stratasys CEO Yoav Zeif, the merger will scale the companies and assure large manufacturers that they can trust additive suppliers. The size of a company, however, does not guarantee great products and services because small companies have been known to deliver consistent quality.

Mergers and acquisitions do not always benefit their industries, and it is too early to know if this merger would have a positive impact. It certainly could, but it remains to be seen how the new company would navigate the challenges inherent in such a large undertaking.

Mergers and acquisitions are not new to either company. Desktop Metal has acquired many companies in the recent past, growing its material portfolio to include polymers, ceramics, and composites. Stratasys, which only provides machines that produce polymer parts, nevertheless has also acquired several companies to expand its offerings. A combined and diversified portfolio could be a benefit, but it would require the expense of additional R&D, commercialization, support, and market development. Only time will tell what actual impact a merger would have.

 

 

 

 

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