In a bid to gain traction in the South Korean market, 3D printing solutions provider Stratasys Ltd. (SSYS) has signed an asset purchase agreement with Sysopt Engineering, a local channel partner of Stratasys. Although the purchase terms were not disclosed, the purchased assets include customer service contracts and inventory of Sysopt Engineering.
Stratasys Korea — a new entity to be formed post purchase — will be a subsidiary of Stratasys Asia Pacific. Stratasys Korea will offer Stratasys’ full portfolio of 3D printing applications and solutions directly as well as thorough its designated channel partners.
We believe that Stratasys’ expansion into new regions will complement its long-term growth prospects. According to a recent survey made by Lux Research, 3D printed parts will be an $8.4 billion global market in 2025 led by automotive, medical and aerospace applications. Moreover, an increasing number of industries are adopting 3D printing for their plants considering the decline in 3D printing costs compared with traditional manufacturing.
According to Wohlers Associates, a consultancy firm, the 3D printing industry is likely to reach $6.00 billion by 2017. The research firm expects this industry to continue to show double-digit growth over the next few years.
Over the years, Stratasys’ additive manufacturing solutions have been used by companies in the automotive, aerospace, defense, electronics, consumer goods, education and other sectors to improve product designs. Stratasys is also working with the U.S. Department of Energy to develop AM processes to aid in production.
On the other hand, Stratsys is concerned about its high-cost business model and competition from big and small players like 3D Systems Corp. (DDD) and Voxeljet. Nonetheless, the acquisition of MakerBot is expected to improve its 3D systems business.
Currently, Stratasys carries a Zacks Rank #3 (Hold). Investors can also consider other companies in the technology space, such as SanDisk Corp (SNDK) and Micron Technology Inc. (MU), which carry a Zacks Rank #1 (Strong Buy).
To read this article on Zacks.com click here.
Get all Zacks Research Reports and be alerted to fast-breaking buy and sell opportunities every trading day.
Be the first to comment