Stratasys Bringing New Additive Manufacturing Platform to Polymer Production with Origin Acquisition

By Marianne D’Aquila

Category:
Acquisition or Partnership

Stratasys Ltd. announced it signed an agreement to acquire 3D printing start-up Origin Inc. in a transaction for total consideration of up to $100 million, including cash and stock.  The merger enables Stratasys to expand its leadership through innovation in the fast-growing mass production parts segment with a next-generation photopolymer platform.  Subject to various approvals and other closing conditions, the acquisition is expected to close in January 2021.

Stratasys expects Origin’s proprietary Programmable PhotoPolymerization (P3) technology to be an important growth engine for the company, adding up to $200 million incremental annual revenue within five years.  The acquisition will help fortify Stratasys’ leadership position in polymers and production applications of 3D printing in industries, such as dental, medical, tooling, and select industrial, defense, and consumer goods segments.

Under the terms of the agreement, the total consideration for the transaction is comprised of $60 million paid on closing ($6 million of which is subject to the founders' retention over 3 years) and $40 million that is subject to performance-based earnouts over 3 years.  The acquisition will be paid using a combination of stock of approximately $45 million and cash of approximately $55 million at closing and throughout the earnout period.  Approximately $32 million of the cash expenditure will be at closing.  The acquisition is expected to accelerate Stratasys’ growth rate and be slightly dilutive to non-GAAP earnings per share in 2021, and accretive to Stratasys' non-GAAP earnings per share by 2023.  The Origin team will join Stratasys and lead the development of its technology and product platform, with a full global launch via the Stratasys go-to-market organization towards mid-2021.

Origin’s P3 technology, an advancement on Digital Light Processing (DLP) principles, cures liquid photopolymer resin with light.  The company’s first manufacturing-grade 3D printer, Origin One, precisely controls light, heat, and force, among other parameters, via Origin's closed-loop feedback software.  This new technology enables customers to build parts with industry-leading accuracy, consistency, size and detail, while using a wide range of commercial-grade, durable resins.

Origin works with a network of material partners, such as Henkel, BASF and DSM, to develop resins for its system. 

The COVID-19 pandemic further illustrated Origin’s technology fit for production applications, including hundreds of thousands of clinically validated nasopharyngeal swabs, thousands of PPE face shields, and ventilator splitters for hospitals.

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