The Future of Additive Manufacturing: Unpacking the Desktop Metal and Stratasys Combination
The landscape of the 3D printing industry has been undergoing a significant transformation in recent years, marked by a pronounced trend towards consolidation. After a period of rapid expansion and the emergence of numerous new players, the market has begun to mature, leading to an increasing number of mergers and acquisitions. This strategic consolidation reflects a natural progression in an evolving industry, as companies seek to strengthen their positions, expand their technological portfolios, and achieve greater economies of scale. In a landmark development that underscores this trend, two titans of the additive manufacturing world, Desktop Metal and Stratasys, have officially announced their intent to merge. This monumental combination is set to reshape the competitive dynamics of the industry, creating a formidable entity expected to finalize its integration by the end of 2023.
Mergers and acquisitions have indeed become a more common strategic maneuver within the 3D printing sector over the past two years, with Desktop Metal itself being a key orchestrator in this wave of integration. In 2021, the company significantly expanded its technological reach and market footprint through a series of notable acquisitions. It quickly acquired both EnvisionTEC, a leader in photopolymer 3D printing technologies (subsequently rebranded as ETEC), and ExOne, a pioneer and market leader in metal and sand binder jetting solutions. These strategic moves demonstrated Desktop Metal’s ambition to build a comprehensive portfolio across various additive manufacturing processes and materials. Meanwhile, Stratasys has also been proactive in refining its strategic direction, not only resisting repeated acquisition attempts from Nano Dimension but also fortifying its material science capabilities by acquiring the 3D printing materials division of Covestro. These individual actions highlight both companies’ commitment to innovation and market leadership, setting the stage for their eventual union.
An example of Stratasys’ advanced industrial 3D printing solutions (photo credits: Stratasys)
The announcement of the merger between Desktop Metal and Stratasys, however, still reverberated with an element of surprise across the industry. Both companies are established giants in their respective niches within additive manufacturing, boasting extensive patent portfolios, strong customer bases, and significant R&D investments. Desktop Metal, despite its rapid growth, had previously faced scrutiny when it implemented layoffs affecting approximately 12% of its workforce as part of a cost optimization initiative. This recent history makes the scale and ambition of this merger even more striking. The transaction is structured as an all-stock deal, valuing the combined entity at an impressive $1.8 billion. The definitive closing of this highly anticipated merger is projected to occur in the fourth quarter of 2023. Under the precise terms of the agreement, Desktop Metal stockholders are slated to receive 0.123 ordinary shares of Stratasys for each share of Desktop Metal Class A common stock they hold, with an approximate value of $1.88 per share. Upon the successful completion of the merger, current Stratasys shareholders are expected to own approximately 59% of the newly combined company, while the legacy Desktop Metal stockholders will hold approximately 41%. This significant consolidation is poised to usher in a new era for additive manufacturing, potentially redefining market leadership and accelerating the adoption of 3D printing technologies across diverse industrial applications.
Strategic Vision: Unpacking the Stratasys and Desktop Metal Merger
The strategic decision to combine these two industry leaders, a move that has been meticulously developed for over a year, is driven by a multifaceted set of objectives, as revealed during a conference call held on May 25th at 8:30 AM EDT, featuring Dr. Yoav Zeif, CEO of Stratasys, and Ric Fulop, CEO of Desktop Metal. Foremost among these drivers is the compelling financial rationale. By uniting their considerable strengths and resources, Desktop Metal and Stratasys project to generate a staggering $1.1 billion in revenue by 2025. This ambitious target is underpinned by their shared vision of becoming “The first industrial AM company covering the full manufacturing lifecycle from design to mass production in both polymers and metal.” This declaration highlights a commitment to delivering comprehensive, end-to-end additive manufacturing solutions that span the entire product development and production spectrum, a capability previously unmatched in the industrial 3D printing market.
During the insightful conference call, both CEOs further elaborated on their profound confidence in this transformative merger. Their optimism stems not only from the ability to combine their impressive and diverse technology portfolios and extensive use cases but also from the opportunity to leverage Stratasys’ highly developed and expansive global distribution networks. This strategic alliance will enable Desktop Metal’s cutting-edge additive manufacturing technologies, particularly in metal and advanced materials, to gain unprecedented market access and accelerate adoption through Stratasys’ established channels. Dr. Zeif underscored the significance of this milestone, stating, “This is an important milestone for Stratasys and Desktop Metal. In light of how we have grown, it was clear that a combination of our companies would significantly accelerate our growth. This is a landmark moment that will transform our companies and help to drive long-term sustainable growth.” The combined entity will boast an unparalleled global reach, encompassing over 65 countries and collaborating with more than 300 channel partners. This extensive network will provide robust global coverage, ensuring representation on every continent except Antarctica, and empowering customers with truly end-to-end solutions for a vast array of materials, from advanced polymers to high-performance metals.
Dr. Yoav Zeif, CEO of Stratasys (left) and Ric Fulop, co-founder, Chairman and CEO of Desktop Metal (right) discussing the merger.
Beyond the compelling financial synergies, a critical driver for this merger is the highly complementary nature of both companies’ technological offerings and their respective market focuses. Zeif and Fulop highlighted how their distinct technologies address extremely different segments of the additive manufacturing market, creating minimal overlap and maximum synergy. Stratasys has long been recognized as a global leader in polymer 3D printing, with a particularly dominant position in advanced technologies such as PolyJet and Fused Deposition Modeling (FDM). Its solutions are well-established and highly regarded in industrial applications, serving sectors from aerospace and automotive to medical and consumer products. In contrast, Desktop Metal has rapidly carved out a significant niche for itself in metal 3D printing, ceramics, and restorative dental applications. The company has increasingly focused its efforts on advanced binder jetting technologies, offering innovative solutions for high-volume production of complex metal parts. This convergence of expertise—Stratasys’ mastery of polymers and industrial systems meeting Desktop Metal’s pioneering work in metals and advanced materials—promises to create a powerful, holistic portfolio capable of serving an unprecedented range of industrial demands and applications.
Innovation is unequivocally a key cornerstone of this strategic combination. The newly formed entity will benefit from a vastly expanded and integrated R&D engine, combining the intellectual capital of over 800 scientists and engineers. This powerhouse of innovation will be supported by a formidable combined patent portfolio, boasting more than 3,400 granted and pending patents. This includes a wealth of intellectual property, especially in critical areas like materials science, process development, and advanced system design. This integrated R&D capability builds upon nearly $500 million in cumulative research and development investments made by both companies to date. With such a robust foundation, the combined organization will be uniquely positioned to accelerate further investment in groundbreaking research. The primary focus of these intensified R&D efforts will be to grow the adoption of 3D printing for end-use parts and mass manufacturing—segments that both companies have identified as the fastest-growing and most impactful areas for the future of additive manufacturing. This commitment to continuous innovation will drive advancements in material properties, production speed, cost efficiency, and overall reliability, making additive manufacturing an even more compelling solution for mainstream industrial production.
The broader impact of this merger on the additive manufacturing industry cannot be overstated. When posed with a question regarding the wider implications during the conference call, Dr. Zeif confidently articulated, “It’s a transformation, we are reshaping the industry. I have been here for three and a half years and it has been a struggle to position additive globally despite it being able to address so many manufacturing challenges in the world. Together, we are going to check the boxes to deliver true value for AM with innovative solutions and end-to-end solutions not just in polymer but also in metal.” This statement encapsulates the ambitious vision of the combined company: to elevate additive manufacturing from a specialized tool to a mainstream, indispensable solution for global manufacturing challenges. By offering comprehensive, end-to-end solutions across both polymers and metals, the merged entity aims to simplify the adoption process for industries worldwide, drive standardization, and unlock the full potential of 3D printing for mass production and customized manufacturing. This strategic alliance is expected to accelerate the industrialization of additive manufacturing, fostering greater confidence among manufacturers and driving further innovation across the entire ecosystem. Until the deal is officially finalized, both Desktop Metal and Stratasys will continue to operate as separate, independent companies. More detailed information about this transformative move can be found HERE.
What are your thoughts on this significant combination of Desktop Metal and Stratasys? Do you believe it will usher in a new era for industrial 3D printing? We encourage you to share your insights and predictions in a comment below or join the conversation on our LinkedIn, Facebook, and Twitter pages! For the latest breaking news and developments in the world of 3D printing, don’t forget to sign up for our free weekly Newsletter here, delivered straight to your inbox. You can also explore all our comprehensive video content and interviews on our dedicated YouTube channel.