You can’t 3D print money, but Stratasys just did the next best thing in buying MakerBot, the one company with the potential to disrupt Stratasys’s 3D-printing business.
The deal will be transacted entirely in Stratasys stock, and the initial acquisition price is 4.76 million shares (worth $403 million today). Depending on MakerBot’s performance, an additional 2.38 million shares could be exchanged as part of the acquisition, yielding a total acquisition value of $604 million. Stratasys is up 3.3% in after-hours trading.
MakerBot’s revenue was $11.5 million in the first quarter of 2013, so a valuation of $604 million represents an impressive multiple. But it’s not an outrageous price considering that MakerBot, with its relatively inexpensive but capable 3D printers, was already eating into Stratasys’s existing business, and in time could have represented a significant disruptive threat.
“MakerBot is giving Z Corp and Stratasys a run for their money,” said Will Gibbs, founder of manufacturing automation firm Corvus and Columba and a 9-year veteran of the 3D printing industry. “They can’t sell their $50,000 machines anymore that are equivalent to MakerBot’s” in their capabilities.
Indeed, side-by-side comparisons of MakerBot’s Replicator and Replicator 2 printers and Stratasys’s cheapest 3D printer, the Mojo, show the Replicator coming out ahead by all measures, despite the fact that the Mojo costs $10,000 and the Replicator is just $2,200. This has led some veterans of the 3D printing industry to wonder, perhaps hyperbolically, how Stratasys would survive in a world full of MakerBot Repilcators and the vast open-source community that supports them.
In acquiring MakerBot, Stratasys isn’t merely capitalizing on all the hype that MakerBot and its charismatic founder, Bre Pettis, have managed to generate for 3D printing. MakerBot managed to make itself an attractive, even necessary, acquisition by following a script familiar to many disruptive 21st-century technology companies: Start with an inexpensive system and refine it over generations until it competes with higher-end technology, but at a much lower price.