An analyst at Bloomberg stated that Stratasys (SSYS) provided Hewlett-Packard and Seiko Epson with an opportunity to go beyond the traditional 2D printing business through acquisitions into the stylish 3D printer sector.
2013 was very unusual for 3D printing. Its stock price in the listed sector has doubled or more. In 2014, more companies are expected to be involved in 3D printing.
HP is working hard to develop 3D printing technology. HP CEO Meg Whitman said last year that the $56 billion computer manufacturer intends to "get involved in the 3D printing market because it is a natural extension of its traditional 2D printing business." HP first stepped into 3D printing. It was through early collaboration with Stratasys, which began in 2010 with the production of HP branded 3D printers, and this partnership ended with 2012. Now that HP plans to enter the 3D printer market in mid-2014, HP's lab is developing the possibility of glass as a 3D printing Material and is developing a possible way to print glass for inoculation.
Seiko Epson has demonstrated its interest in this fast-growing market. In 2011 Seiko Epson President Sakae Sakai said in an interview with the media that his company is developing industrial-grade 3D printers and plans to launch 3D printers after a few years. It is said that any product can be printed.
"Compared to the development of its own 3D printers, the company will be more cost-effective to purchase growth opportunities through the purchase of Stratasys," Bloomberg said.
"The acquisition of Stratasys will be expensive and the company's recent share price is approaching a new record." According to Bloomberg's statistics, Stratasys' valuation has a 33% discount compared to its competitor 3D Systems. But UBS’s New York-based analyst Jon Shaffer believes that Stratasys has become a more attractive acquisition target than its competitor, 3D Systes, because since the acquisition of MakerBot, a large part of his business is associated with consumers. Shaffer estimates that Stratasys may require a 25% premium, which is approximately $153 per share.
Bloomerg's data show that Stratasys' market value is 5.2 billion US dollars, which is 7.8 times its expected sales this year. And 3D Systems is 11.7 times. Bloomberg believes that the acquisition of Stratasys is a better deal.
"Stratasys has no reason to discount," said FBR's Kejriwal. According to fundamentals, Stratasys has "first-rate products and technology. It has a very solid management team and a good brand."
Headquartered in Eden Prairie, Minnesota, and Rehovot, Israel, Stratasys began manufacturing 3D printers more than 20 years ago. According to consulting firm Wohlers Associates, it is now one of the largest companies in the global market for $2.9 billion. Stratasys' customers include Boeing, Ford Motor, Boston Scientific (BSX) and Nike.
Wohlers Associates said that sales of global 3D printing products and services may double by 2017 to about $6 billion, and by 2021 will increase to $11 billion. According to analysts' forecasts, the Stratasys family's sales revenue may increase from 482 million U.S. dollars in 2013 to about 1 billion U.S. dollars in 2016.
When Stratasys spokesman Shane Glenn was asked if he was interested in selling, he said that according to the company's policy, he declined to comment.
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