Stratasys J55 PolyJet 3D Printer [Source: Stratasys]
Charles R. Goulding and Preeti Sulibhavi discuss the attempted merger between 3D Systems, Stratasys, Desktop Metal and Nano Dimension.
Stratasys and 3D Systems have remarkably similar levels of R&D spend and Desktop Metal has a much larger recent spend reflecting a series of major acquisitions.
Nano Dimension has a much larger R&D expense level.
The saga revolving around the potential merger of various combinations of the top four 3D printing players has finally concluded. The involved companies include 3D Systems, Stratasys, Desktop Metal and Nano Dimension. The entire ordeal started on May 23, 2023, and closed with the announcement on September 28, 2023, that Stratasys decided not to pursue the anticipated acquisition of Desktop Metal.
The one group that clearly benefitted from the situation was the multitude of law firms, PR firms and consultants providing assistance to each party. Hopefully, each company gained insights about the overall 3D printing market and their rivals which they can leverage.
It’s back to business now for each company. During the course of the merger discussions, there were numerous promises made about cost reductions, some of which may be realized individually by the companies.
We prefer to assess each company by comparing R&D spending. The results of this analysis are shared below.
We always felt the Nano Dimension had unique opportunities in the electronics space and they have acted on that concept by recently acquiring some niche companies including:
- Global Inkjet Systems (GIS) was acquired in January 2022. GIS is a UK-based, leading developer and supplier of application software, drive electronics and ink system components – supporting a wide range of industrial inkjet printheads.
- Essemtec was acquired in November 2021. Based out of Waltham, Massachusetts, their business revolves around adaptive highly flexible SMT pick-and-place equipment, elaborate dispensers suitable for both high-speed dispensing and micro dispensing as well as an intelligent production material storage and logistic system.
- Fabrica was acquired in April 2021. Headquartered in Windsor, Connecticut, Fabrica is committed to the craft of designing unique façade systems. Every project is a custom artwork, every design solution is unique, and every part is singular.
- DeepCube was also acquired in April 2021. DeepCube is recognized as the experts in deep learning and AI for 3D printing. DeepCube’s pioneering inference accelerator drastically improves performance on additive manufacturing hardware.
The Research & Development Tax Credit
The now permanent Research and Development (R&D) Tax Credit is available for companies developing new or improved products, processes and/or software.
3D printing enhances a company’s prospects for R&D Tax Credits. Financial credits can be allocated for the time technical staff use to generate, experiment, and tweak 3D printed prototypes, based on the percentage of eligible time spent on the R&D Tax Credit. 3D printing, when utilized to advance a workflow, is also considered worthwhile. The time invested in syncing 3D printing equipment and software is credited as an approved activity. Additionally, the expense of filaments exhausted during the innovation process can be claimed.
3D printing is a strong sign that activities eligible for R&D Credit are taking place, regardless of whether it is used to create and test models or for final product creation. Companies applying this technology should think about claiming the benefits of R&D Tax Credits.
Final Thoughts
The M&A procedure can be time-consuming for management, especially in the case of hostile acquisitions. The organic growth opportunities in the 3D printing sector are vast, with significant support from governments and universities. It is our hope that the industry will reflect on this predicament and return to operations.
“Why did the 3D printer go to therapy? Because it had too many layers of unresolved issues!”
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