Stratasys made an extremely bold move by announcing they’ve acquired the additive manufacturing materials business of Covestro.
Covestro is a major chemical company, originally a spin-off from Bayer launched in 2015. Today they sell almost €16B (US$16B) of polyurethane and polycarbonate materials each year, with ten percent of that being income. The market valuation of this company is currently well over US$6.5B, making them 5X larger than Stratasys.
Stratasys is one of the major players in 3D printing, and was the inventor of the FDM process that dominates the unit sales of 3D printers worldwide today, although their patent on FDM expired some years ago. However, through a series of corporate acquisitions, Stratasys now boasts of a wide breadth of different 3D printing technologies that offer unique part production capabilities.
It’s important to note that Stratasys did not acquire Covestro: they could never afford to do so. Instead, they’ve captured Covestro’s additive manufacturing materials business, which is comprised of quite a few assets. Stratasys explains:
“It will include R&D facilities and activities, global development and sales teams across Europe, the U.S. and China, a portfolio of approximately 60 additive manufacturing materials, and an extensive IP portfolio comprised of hundreds of patents and patents pending.”
The deal is expected to close early next year, and it sounds like Stratasys will largely maintain existing staff and facilities, although history shows they may consider swapping in their own people at the top.
The purchase price was said to be near US$44M, with the possibility of paying out an additional US$38M should “various performance metrics” be achieved by Stratasys.
For Stratasys, the acquisition could provide a massive materials platform for their newly acquired 3D printing processes from Xaar, RPS and Origin, which could form the base revenue of the company in years to come. These systems are focused on production, rather than prototyping, so it’s very likely there will be massive amounts of materials to be sold once their use is widespread.
For the rest of the 3D print industry, this is perhaps a milestone moment. In the recent past we’ve seen chemical companies finally “turn on” to 3D printing and enter the space with adaptations of their existing chemical portfolio. This acquisition takes the pattern forward in that the AM portion of one of these chemical companies has now been absorbed by a 3D printer manufacturer. This has never happened previously, at least on this scale.
The result will no doubt be an explosion of unique AM-specific materials for many different machines and 3D printing processes in coming years.
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About the Author: Kerry Stevenson is passionate about 3D printing and has written thousands of stories on 3D printing technology at Fabbaloo.