Stratasys Acquires Arevo’s Technology Portfolio, Strengthening its Innovation Leadership in Additive Manufacturing
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Insights
The acquisition by Stratasys Ltd. of Arevo's technology portfolio signifies a strategic move to consolidate its position in the polymer 3D printing industry. The inclusion of foundational patents in carbon fiber printing and other technologies is likely to enhance Stratasys' competitive edge. By integrating these patents into their Fused Deposition Modeling (FDM) systems, Stratasys can potentially offer superior products with improved strength and isotropy, which are critical factors in manufacturing applications.
From a market perspective, this could result in increased adoption of Stratasys' FDM systems, as manufacturers seek more reliable and cost-effective solutions. The emphasis on improved isotropy addresses a common limitation in 3D printing, where parts often exhibit anisotropic behavior, leading to variable strength depending on the orientation of the print layers. Overcoming this challenge could open up new markets and applications for Stratasys, potentially driving revenue growth and strengthening its market share.
Furthermore, the focus on in-situ and AI build monitoring suggests a push towards smarter manufacturing solutions, which aligns with industry trends towards Industry 4.0 and the Internet of Things (IoT). This strategic acquisition may also serve as a deterrent to new entrants by increasing the technological barriers to entry. However, the long-term success of this strategy will depend on the effective integration of the acquired IP into Stratasys' existing product lineup and their ability to capitalize on the new capabilities.
Stratasys Ltd.'s acquisition of Arevo's IP estate is a capital allocation decision that could have significant financial implications. By diversifying its patent portfolio with 2,600 total granted and pending patents, Stratasys is not only investing in technology but also in potential market exclusivity. This could lead to stronger pricing power and higher margins if the new technologies can be commercialized effectively.
Investors should monitor Stratasys' R&D spend and integration costs associated with this acquisition. While the initial investment may be substantial, the long-term reduction in customer adoption barriers and improvement in parts economics could lead to an enhanced return on investment. The company's ability to accelerate the usage of FDM printing applications will be critical in determining the financial success of this acquisition.
It is also important to consider the potential impact on Stratasys' income statement and balance sheet. The acquisition could lead to increased amortization expenses related to the newly acquired intangible assets, which could affect net income in the short term. However, if the new technologies lead to increased sales and market share, this could be offset by higher revenue in the future.
The acquisition of Arevo's IP estate by Stratasys is a move that not only has business implications but also legal and regulatory considerations. The foundational patents acquired could provide Stratasys with legal leverage to protect its innovations and potentially pursue litigation against competitors who infringe on these patents. This could result in a more defensible market position and possibly create additional revenue streams through licensing agreements.
However, it is also essential for Stratasys to ensure compliance with all antitrust and competition laws, as increasing its patent portfolio might attract scrutiny from regulatory bodies concerned with market monopolization. The company must navigate the legal landscape carefully to maximize the benefits of the acquisition while mitigating risks related to intellectual property law, such as patent validity challenges or disputes over the scope of the patents.
Stratasys will need to conduct thorough due diligence to ensure that all acquired patents are enforceable and that there are no existing legal challenges against Arevo's IP. This proactive approach can prevent future legal disputes that could undermine the value of the acquisition and distract from the company's core business objectives.
Acquisition of patented IP and assets helps Stratasys accelerate adoption of FDM applications for manufacturing
The acquisition of the IP estate includes multiple foundational patents in carbon fiber printing, Z-strength improvement achieved by localized laser melting and roller compaction, in-situ and AI build monitoring, and hardware design. Adoption of this technology in Stratasys FDM® print systems enables Stratasys to extend its addressable manufacturing applications for its customers.
Stratasys will be able to accelerate usage of FDM printing applications by eliminating customer adoption barriers associated with requirements for higher performing parts including strength and isotropy, more reliable and consistent builds, and improved system throughput for better parts economics.
“The technology we’ve acquired allows for increasingly improved isotropy of physical properties in FDM parts, which opens up additional use for customers,” said Rich Garrity, Stratasys’ Chief Industrial Business Officer. “This investment continues our commitment to focusing our organic and inorganic innovation on applications and use cases that provide real value to our manufacturing customers, ensuring that Stratasys will continue to be the most relevant and attractive partner moving forward.”
This acquisition of assets reflects Stratasys’ clear strategy to create practical value for its customers by investing in innovation, through both organic R&D as well as the acquisition of technology and IP. The 2,600 total granted and pending patents in its portfolio differentiates Stratasys from the rest of the industry.
About Stratasys
Stratasys is leading the global shift to additive manufacturing with innovative 3D printing solutions for industries such as aerospace, automotive, consumer products and healthcare. Through smart and connected 3D printers, polymer materials, a software ecosystem, and parts on demand, Stratasys solutions deliver competitive advantages at every stage in the product value chain. The world’s leading organizations turn to Stratasys to transform product design, bring agility to manufacturing and supply chains, and improve patient care.
To learn more about Stratasys, visit www.stratasys.com, the Stratasys blog, Twitter, LinkedIn, or Facebook. Stratasys reserves the right to utilize any of the foregoing social media platforms, including Stratasys’ websites, to share material, non-public information pursuant to the SEC’s Regulation FD. To the extent necessary and mandated by applicable law, Stratasys will also include such information in its public disclosure filings.
Stratasys and FDM are registered trademarks of Stratasys Ltd. and/or its affiliates.
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Investor Relations:
Yonah Lloyd, Stratasys Investor Relations, +972 74 745 4919
Media contacts:
Chris Reese, Stratasys Corporate, Americas Region Public Relations, +1 651 357 0877
Erik Snider, Stratasys Corporate, Israel Public Relations, +972 74 745 6053
Jonathan Wake / Samantha White,
Erica Massini,
Kalyani Dwivedi, Asia Public Relations, +91 80 6746 2606
Source: Stratasys Ltd.
FAQ
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