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3D Systems to Buy Robtec

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After the announcement of its strategic partnership with Staples Inc. , on Monday (Apr 14), 3D Systems Corporation (DDD - Free Report) yesterday announced that it intends to acquire a Latin American 3D printing and additive manufacturing company Robtec, for an undisclosed sum. The deal is expected to close within the next three months and is anticipated to be immediately accretive to 3D Systems’ earnings.

The deal is a planned move by 3D Systems to strengthen its local additive manufacturing service bureau capabilities alongside gaining a firm foothold in Latin America by creating a key sales and service platform to drive accelerated adoption of the company’s entire design-to-manufacturing solutions. Besides proving product synergies, the acquisition of Robtec also 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 since the past two decades and has leading industrial companies as its clients. Robtec has 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 - Free Report) — seem to be on an acquisition spree. The acquisition of Robtec by 3D Systems comes 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.

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 big and small players.

Moreover, synergies from recent acquisitions and collaborations with Hasbro (HAS) and The Hershey Co. (HSY - Free Report) are added positives for the company.

3D Systems is a leading provider of 3D printing centric design-to-manufacturing solutions. Its comprehensive range of 3D printers are the industry's benchmark for production-grade manufacturing in the aerospace and automotive sectors, patient-specific medical devices and a variety of consumer, electronic and fashion accessories.

Currently 3D Systems carries a Zacks Rank #4 (Sell).

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