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Stratasys Bolsters 3D Printing Portfolio

NEW YORK (The Deal) -- Three-dimensional printing company Stratasys (SSYS - Get Report) said Wednesday it will buy Solid Concepts for $295 million. It will also pick up Harvest Technologies for an undisclosed sum.

The targets operate large 3D printing service bureaus that produce prototypes, parts and other objects for manufacturers and other clients.

Valencia, Calif.-based Solid Concepts and Belton, Texas-based Harvest Technologies have 5,000 and 1,000 customers, respectively, according to JPMorgan Chase & Co. Stratasys CEO David Reis said that the company would combine the businesses with its RedEye service bureau.

JPMorgan analyst Paul Coster noted that the price for Solid Concepts comes to 4.5 times sales, which he deemed "reasonable" in a report. Stratasys trades at 8.6 times sales, and rival 3D Systems Corp.'s valuation is at 17.8 times sales.

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"The acquired businesses have experience in a broad range of additive manufacturing and rapid prototyping services and technologies (including some traditional techniques, also metals)," Coster wrote, adding that the purchases would broaden Stratasys' services. "This should sustain [Stratasys'] leadership position in the market, and yield cross-selling opportunities at some key accounts in aerospace, automotive, medical and industrial verticals."

Stratasys is the largest 3D printer company ranked by number of units sold, according to UBS. Founded in the 1980s, the company has a history of acquisitions.

"In the last three years, the company has done three relatively large deals in the systems space," UBS analyst Steven Milunovich wrote in a recent report.

Stratasys purchased Solidscape Inc. for $38 million in 2011. The company merged with Objet Ltd. in a deal valuing the combined companies at $3 billion. Last year, Stratasys bought MakerBot Industries LLC for $400 million.

The Minneapolis, Minn., and Rehovot, Israel, buyer said it aims to close the purchases of Solid Concepts and Harvest Technologies in the third quarter.

A Stratasys spokesman said that the company did not use outside bankers or lawyers.

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