Stratasys buys San Francisco-based 3-D printing company for $100M

Stratasys is buying a San Francisco-based 3-D printing company in a $100 million deal.

Stratasys, based both in Eden Prairie and Rehovot, Israel, is paying $60 million in cash and stock when the deal closes, probably in January, and another $40 million over the next three years, based on performance-based criteria, to acquire Origin Inc. Milestone payments will depend on achieving annual revenue targets.

Origin uses a software-based process to mass produce parts using industrial-grade resins. The company is expected to add $200 million in incremental annual revenue to Stratasys over the next five years.

Stratasys 3-D printers help make prototype parts but the deal for Origin moves them deeper into 3D printed production parts. Stratasys says manufacturing applications is the largest and fastest growing part of the 3-D printing industry with an addressable market of $25 billion by 2025.

"Stratasys now has the most complete set of 3D printing solutions in the industry, we are the full package," Stratasys CEO Yoav Zeif told analysts on a conference call.

Stratasys expects the deal to slightly impact its earnings in 2021 and become accretive by 2023.

"Our customers are looking for additive manufacturing solutions that enable use of industrial-grade resins for mass production parts with process and quality control," said Zeif in a news release. "We believe Origin's software-driven Origin One system is the best in the industry by combining high throughput with incredible accuracy."

Origin's system uses UV light, heat, and force to cure liquid photopolymer resins into production ready parts. The company's closed-loop feedback software controls the process and allows customers to produce highly accurate and durable parts with speed and consistency.

"We founded Origin to create a whole new additive manufacturing platform that enables mass production of end-use parts with incredible accuracy, consistency, and throughput along with a wide range of available materials," said Origin CEO Christopher Prucha in the release.

Origin was founded in late 2015 by Prucha and Joel Ong, former software engineers at Apple and Google. Origin has found applications in the shoe industry and most recently has mass produced nasopharyngeal swabs for COVID-19 test kits.

The company launched its first product at the end of 2019 and now says it has shipped low hundreds of printing systems to customers in the United States and nine other countries. Annual revenue is below $10 million.

Origin has 35 employees and the team is expected to continue to be based out of San Francisco.