Stratasys stock rises 5.3 percent on acquisition rumor
- Article by: Steve Alexander
- Star Tribune
- June 10, 2013 - 9:21 PM
Rumors of a pending acquisition and a swirl of favorable publicity gave a more-than-5-percent boost to the stock of Stratasys, the 3-D printer company now based in both Eden Prairie and Israel.
The stock closed Monday at $82.65, up $4.17, or 5.3 percent. At one point in early afternoon trading, the stock was up 7 percent.
On Saturday, the online tech news site TechCrunch.com quoted unnamed sources as saying Stratasys, one of the largest companies in its field, was in talks to acquire MakerBot, a New York City-based maker of low-end 3-D printers.
Representatives of Stratasys and MakerBot could not be reached for comment Monday.
The run-up in the stock comes at a time of unprecedented interest in 3-D printing, which holds out the promise of revolutionizing the manufacturing of some everyday objects, such as coffeepots, machine parts and, to the dismay of some, guns, by personal devices that print physical objects by layering deposits of sprayed material.
Stratasys stock likely is benefiting from the large amount of publicity surrounding the potential uses of 3-D printing rather than from the perceived benefits of acquiring a smaller company, said Andy Adams, an analyst at fund manager Mairs and Power in St. Paul, which owns Stratasys shares.
“We met with the Stratasys people two weeks ago, and they’re still trying to get their arms around their Objet merger, which was a merger of equals,” Adams said in an interview. “I’d be surprised if people were excited about another acquisition right now.”
A search for “3-D printing” on Google News produced a page full of enthusiastic headlines claiming the technology is likely to change the future. While some of the possibilities of 3-D printing remain more science fiction than fact, given that the plastic parts generated by 3-D printers are not as durable as their metal counterparts, the technology has found wide applications in industry as a way to rapidly turn around prototypes of new products.
Stratasys Ltd. builds 3-D printers and the materials they spray for the creation of product prototypes and models. The company was formed through the Dec. 3, 2012, merger of Stratasys Inc. and Objet Ltd., a similar firm based in Rehovot, Israel. Revenue for the two companies, calculated as if they had been combined at the start of 2012, rose 29.6 percent to $359.1 million and earnings per share grew 59.1 percent to $1.49 per share.
In a May report, J.P. Morgan described Stratasys as “the leader in the professional and production segments of the 3-D market.”
Also in May, a Needham and Co. report said that Stratasys had assembled a team of 11 people to explore acquisitions, although the company would provide no details.
In February, the New York Times reported that MakerBot made consumer 3-D printers that allow people to create their own parts to fix a blender or provide lifts for shoes. MakerBot maintains a database of 36,000 downloadable designs that can be created on its printers. Last fall, the company opened in New York City what was believed to be the first retail store for 3-D printers.
Consumer products that are being made with today’s 3-D printers include jewelry, clothing, toys and prosthetic limbs. Earlier this year, a law student at the University of Texas at Austin posted online the 3-D printer pattern for printing a handgun he called the “Liberator.” The student, Cody Wilson, removed the pattern from the Internet after the State Department demanded he do so because of possible export control violations.
Additive manufacturing and 3-D printing is a $2.2 billion industry, according to a 2013 report prepared by Wohlers Associates, an industry consulting group in Fort Collins, Colo.
Steve Alexander • 612-673-4553
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