At next month’s Inside 3D Printing Conference & Expo in Santa Clara, we’re looking forward to hearing from some of the best and brightest in the 3D printing industry. Speakers at the event will span a broad range of topics, as will the exhibits on display.
Bryan Dow, Executive Director of Mooreland Partners, will be speaking on October 22nd at Santa Clara. At 9 AM, he will present “Print Me an Investment Banker: Additive Manufacturing M&A and Financing Trends.” He’s taken the time to tell 3DPrint.com some of his thoughts ahead of time, providing some insights into the world of finance as it relates to the still-young additive manufacturing industry.
In Dow’s own words:
“As I am constantly reminded by CNBC, 3D Printing stocks have taken a beating in the public markets. Share prices of 3D Systems and Stratasys are down 60% and 54%, respectively, since March 2015, and have fallen over 80% since the initial tumble from their all-time highs in January 2014. Fundamental market factors such as increased competition and pricing pressure, build vs. buy activity of large enterprises, and fear of commoditization of hardware have all been cited in the Street’s rationalization of the downturn. No doubt earnings estimate misses, short selling by traders and general market sobering have all played a part in this public markets correction, as well, and have brought new public financings to a screeching halt with zero 3D Printing IPOs YTD.”
The stock market has been historically volatile in any case, but particularly so in the 3D printing/additive manufacturing arena, as we’ve seen. Full of buzzwords that start with “potential” and sometimes end with “bubble burst,” the stocks generally have given investors cause for pause.
“Whatever the cause, 3D Printing stock performances have put the most active M&A buyers in the penalty box, while DDD and SSYS look within their own walls for answers to organic growth and margin enhancement. In 2015, 3D Systems and Stratasys have completed only three deals and two deals, respectively (with only one deal total completed since April 2015), compared to seven deals and five deals in 2014 and seven deals and one deal (MakerBot) in 2013. Additionally, neither company has reported a $100M+ acquisition in 2015, as seen in previous years (e.g. GrabCAD, Simbionix, SolidConcepts and, of course, MakerBot).”
The companies mentioned have all had particularly tumultuous pasts, though we’ve seen hints in recent months that perhaps we’ve finally seen a bottom, such as insider purchases out of 3DS. While we’re still not entirely sure what to expect, there are some projections that can be made with the information available. It also seems that we’re finally able to see some more confidence in stocks, with recent optimism signifying long-term potential, after all.
Outside of the big names that draw attention in the space, we’re definitely seeing the dynamics of the market at play as other companies begin to take center stage. Acquisitions, R&D, partnerships, and other moves have catapulted other figures into the limelight.
“While the lead consolidators experience a valuation correction and are soul searching at home, the recent increase in 3D Printing partnerships and projects involving leading out-of-segment enterprises offers a promising sign for the market. Companies such as Alcoa, Amazon, Autodesk, GE, HP, Siemens, Staples, UPS and many others have all made significant investments in 3D Printing companies and capabilities, and these leaders could potentially pick up the M&A activity where DDD and SSYS left off.
“Private investments, however, have maintained reasonable momentum despite the turmoil in the public markets. Several investments have been completed in 2015, the most notable being last month’s $100M raise by Carbon3D, which drew investment from several leading investors, including strategics Google Ventures and Autodesk as well as Sand Hill legends, Sequoia Capital and Silver Lake’s Kraftwerk fund. In June, 3D Printing marketplace provider, Shapeways, also secured financing from top tier technology investors in its $30M Series D which included new investor, HP.
“Market correction aside, the 3D Printing market is more dynamic than ever. Between the growing list of out-of-segment leaders participating in and evaluating the space and the landmark private placements from leading venture and strategic investors, we anticipate a number of exciting developments in 2016.”
These and other insights will be discussed at Inside 3D Printing Santa Clara at Dow’s presentation. Readers of 3DPrint.com can save now on registration for the event: use the discount code 3DPRINT to save 20% off!