3D Systems Corporation (DDD) announced the completion of the acquisition of Latin America-based 3D printing and additive manufacturing company Robtec, for an undisclosed sum. 3D Systems has acquired 70% of Robtec’s shares while the remaining will be transferred on the fifth year of the acquisition. The decision to acquire was announced in Apr 2014.
The deal is a strategic move by 3D Systems intended to strengthen its local additive manufacturing service bureau capabilities along with gaining a firm foothold in Latin America by creating a key sales and service platform to drive accelerated adoption of the company’s entire range of design-to-manufacturing solutions. Apart from proving product synergies, the acquisition of Robtec broadens the reach of 3D Systems’ global Quickparts service offerings expanding its reseller channel activities in Brazil, Argentina, Chile, Uruguay and Mexico.
Based in Sao Paulo, Brazil, Robtec is the leading additive manufacturing service bureau and also the principal 3D printing and scanning products distributor in the region. The company has been operating for the past two decades and has leading industrial companies as its clients. Robtec also enjoys a strong foothold in Latin America with a well-established regional infrastructure.
The 3D printing and additive manufacturing market is experiencing rapid consolidation as two leading players — 3D Systems and Stratasys Ltd. (SSYS) — seem to be on an acquisition spree. The acquisition of Robtec by 3D Systems had happened right after Stratasys signed an asset purchase agreement to acquire some assets of Interfacial Solutions, a production partner of Stratasys’ Fused Deposition Modeling (FDM) platform.
Meanwhile, 3D Systems has been resorting to strategic acquisitions to diversify its offerings and expand its operating markets. The company expects its portfolio of new and innovative products to lead to more than 30% organic growth in the next couple of years, thereby enhancing its margins and earnings. However, 3D Systems is apprehensive about its high-cost business model and competition from other industry players.
Currently, 3D Systems carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the sector include Alps Electric Co. Ltd. (APELY) and Mercury Systems, Inc. (MRCY). Both sport a Zacks Rank #1 (Strong Buy).
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