Align Technology, Inc. (ALGN - Free Report) announced the completion of its buyout of exocad Global Holdings GmbH, which is a privately-held key player in the dental computer-aided design/computer-aided manufacturing (CAD/CAM) software market. The buyout agreement was initially signed on Mar 4. The acquisition has expanded Align Technology’s digital platform’s reach by adding technology to enable ortho-restorative and comprehensive dentistry.
Notably, Align Technology and exocad have been collaborating since 2017. Per Align Technology’s management, the acquisition is the next step to take forward the collaboration.
With the recent addition, Align Technology aims to strengthen the CAD/CAM services of its Scanners and Services business segment globally.
Rationale Behind the Buyout
Through the buyout, Align Technology aims to address restorative needs in an end-to-end digital platform workflow. The buyout will also enable the company to expand its customer base through exocad, which offers fully integrated workflows to dental labs and dental practices in more than 150 countries.
The buyout will also enable Align Technology to integrate exocad’s expertise into its technology portfolio. Further, it will extend the Invisalign and iTero digital solutions for a new and seamless cross-disciplinary dentistry in the lab and at chairside. The exocad buyout also broadens Align Technology’s platform reach in the digital dentistry, with close to 200 partners and more than 35,000 licenses installed worldwide.
Notably, exocad will continue its current operations, which will enable it to support a wide network of partners and end-users. It will also continue to deliver hardware-independent software solutions. Align Technology plans to maintain all exocad products and services.
Per a report by technavio published on Market Research.com, the global dental CAD/CAM market is projected to grow by $422.68 million between 2020 and 2024, witnessing a CAGR of 9% during the forecast period. Factors like the growing demand for dental cosmetic surgeries and the extensive use of intra-oral scanners are expected to drive the market.
Given the market potential, the buyout seems well-timed.
Of late, Align Technology has seen a series of developments in its product portfolio.
The company received the FDA’s clearance for the commercial availability of the iTero Element 5D Imaging System in the United States in February.
Further, in the same month, Align Technology launched the ClinCheck In-Face Visualization tool for the Invisalign Go system, which is the company’s innovative tooth movement system designed for general dentists. The visualization tool enhances the digital treatment planning experience for doctors and patients. The tool will initially be available with the Invisalign Go system and will be rolled out across the Invisalign portfolio throughout the year.
Shares of the company have lost 47.2% in the past year compared with the industry’s 23.7% decline.
Zacks Rank & Key Picks
Currently, Align Technology carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are ResMed Inc. (RMD - Free Report) , National Vision Holdings, Inc. (EYE - Free Report) and Phibro Animal Health Corporation (PAHC - Free Report) .
ResMed has a projected long-term earnings growth rate of 14.4%. It currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
National Vision’s long-term earnings growth rate is estimated at 10.7%. The company presently has a Zacks Rank #2.
Phibro’s long-term earnings growth rate is estimated at 2.1%. It currently carries a Zacks Rank #2.
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