Nano Dimension (Nasdaq: NNDM) has taken the recent excitement in the 3D printing market to grow rapidly. Before 2021 was over, the pioneer of circuit board 3D printing scooped up micro additive manufacturing (AM) startup Nanofabrica, Swiss maker of electronic assembly equipment Essemtec, and machine learning firm DeepCube. Now, the Israeli company is kicking off 2022 with yet another buy, this time Global Inkjet Systems Ltd. (GIS).
Nano Dimension had already made a name for itself with an inkjet 3D printing technology capable of combining electrically conductive materials with dielectric materials to create printed circuit boards (PCB). In 2021, the firm released the latest version of its PCB 3D printing system, the DragonFly IV, which showcases the ability of newer generations of Nano Dimension 3D printers to incorporate capacitors, coils, antennas, electro-mechanical components, and transformers in the build, as well as conductive and dielectric inks.
The purchase of GIS will broaden these capabilities even further. Founded in 2006, GIS develops inkjet hardware and software, such as electronics for ink supply and control, among other things. Its Atlas software is a modular suite for controlling everything from translating data to printing, including the necessary sub-systems and peripherals. So far, the U.K. firm’s technology has been deployed for such applications as direct-to-container packaging, printed electronics, and inkjet 3D printing.
Altogether, for Nano Dimension, this partnership could mean closer control over its own supply of inkjet electronics, with the company owning an in-house provider of drivers, hardware, and software for its PCB 3D printing. Of course, GIS could also provide other Nano Dimension subsidiaries that same advantage. The company noted that the acquisition will speed up product development, including its latest PCB 3D printing technology.
“GIS’ ink delivery technology and software are essential to any ink deposition methodology within our AME and AM solutions. GIS’ research and development roadmap will help us to deliver better resolution and higher productivity in our industrial 3D printing solutions,” commented Yoav Stern, Chairman and Chief Executive Officer of Nano Dimension. “As a result of this acquisition, we will be able to improve our technology’s performance and time to market. The combined company will own and have access to innovative and yet-to-be-released printing technologies, providing value and leading-edge solutions tailored to our customers’ needs and giving us a clear competitive advantage.”
Additionally, Nano Dimension noted that GIS obtained $10 million in revenue for a 12-month period ending March 31, 2021 (i.e., pre-COVID), with a gross margin of 51 percent. This could afford the Israeli firm with an additional revenue stream. For the buy, Nano Dimension paid $18.1 million in cash to GIS shareholders, with an upcoming $1.3 million to $10.7 million over the next 27 months if GIS “achieves certain financial performance over this period.”
GIS will be continuing to develop and sell its hardware and software, with Nano Dimension seeing it play an increasing role in the AM market. The companies will benefit from cross-exposure, as well, as GIS will be able to tap into Nano Dimension’s markets and vice versa.
“We are very excited to be joining a company that recognizes the excellence of our technologies, our passion for innovation and matches our customer-focused culture,” stated Nick Geddes, Founder, and CEO of GIS. “Working together, we will be pushing the envelope beyond existing printing capabilities in ways our customers will gain advantages that are unmatched yet.”
In the past, there has been some criticism of Nano Dimension ranging from its dilution of shares and potentially foolhardy acquisitions to the potential behavior of its management team. DeepCube, for instance, does not immediately seem to align with PCB 3D printing and the fact that two of DeepCube’s executives are directors of Nano Dimension could be a red flag, as InvestorPlace noted. NanoDimension CEO Yoav Stern was previously accused, but not convicted of, an “extortion attempt” after its former chairman was arrested on charges of money laundering, aggravated fraud, and securities violations,” according to Edwin Dorsey.
Nevertheless, the firm is also being described as undervalued by some, such as Seeking Alpha, due to the fact that, through a series of capital raises, Nano Dimension has $1.4 billion in cash, cash equivalents, and short-term investments, $1.1 billion of which is in cash alone. Its debt pales in comparison at $3.5 million, yet the business’s market cap is below the money it has on hand at $970 million. In turn, the stock is worth about 66 percent of its true value.
While the company is hoping to profit from the sale of its DragonFly IV 3D printer and Nano Fabrica Tera 250 machines, it’s important to have a company like GIS under its belt. The more established business will allow for a steadier stream of funds than the newer businesses could surely provide.
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