Stratasys to Buy Origin

Stratasys Ltd. has 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 through innovation in the 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 Programmable PhotoPolymerization (P3) technology to be an important growth engine for the company, adding up to $200 million incremental annual revenue within 5 years, the company says. 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, according to Stratasys.

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. 

“Our customers are looking for additive manufacturing solutions that enable use of industrial-grade resins for mass production parts with process and quality control,” says Stratasys CEO Yoav Zeif. “We believe Origin’s software-driven Origin One system is the best in the industry by combining high throughput with incredible accuracy.

"When combined with Origin’s extensive materials ecosystem and our industry-leading go-to-market capabilities, we believe we will be able to capture a wide range of in-demand production applications on a global scale," Zeif adds. "Together with our intended entry into powder bed fusion technology, the acquisition of Origin reflects another step in fulfilling our objective to lead in polymer additive manufacturing by offering comprehensive, best-in-class technologies and solutions to create a fully digital additive value chain, designed for Industry 4.0 integration.”

According to an internal Stratasys market analysis, manufacturing applications show the most potential for significant growth in the 3D printing industry, reaching approximately $25 billion by 2025. Stratasys anticipates that production-oriented resin-based solutions can address a significant part of the total market for polymer additive manufacturing. In fact, it is estimated that resin polymer-based additive systems will grow at a 20% annual rate from 2020 to 2025.

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.

“We founded Origin to create a whole new additive manufacturing platform that enables mass production of end-use parts with incredible accuracy, consistency, and throughput along with a wide range of available materials,” says Origin CEO and co-founder Christopher Prucha. “Stratasys is the best company for us to join to achieve our vision, giving us an unparalleled opportunity to significantly expand market reach and enable us to bring our P3 technology to a larger audience.”

Sources: Press materials received from the company and additional information gleaned from the company’s website.