3D Systems Corporation (NYSE:DDD) announced its agreement to acquire all of the outstanding shares of Cimatron Ltd. (NASDAQ:CIMT) for $8.97 per share or $97 million.
According to the 3D printing company, the acquisition will strengthen its position in the fast-growing 3D design and manufacturing sector.
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The transaction will also complement its products and technology and extend its direct and reseller coverage around the world. 3D Systems Corporation (NYSE:DDD) expected the acquisition to be immediately accretive to its cash generation and Non-GAAP earning per share upon closing.
The companies expect to close the deal in the first quarter of 2015. The transaction is subject to the approval of the shareholders of Cimatron Ltd. (NASDAQ:CIMT), customary closing conditions and regulatory approval.
In a statement, Avi Reichental, president and CEO of 3D Systems Corporation (NYSE:DDD) said, “We believe that the perfect strategic fit between our businesses, combined with expanded capabilities in product development, channel coverage and marketing, could present sizeable synergies that together offer significant long-term customer benefits and shareholder value.”
Acquisition will push 3D Systems further into software
In a note to investors, Goldman Sachs analysts Samuel Eisner and his team commented that the transaction could push 3D Systems Corporation (NYSE:DDD) further into software, an area which can help create greater solutions to the industry.
Eisner and his team believed that the acquisition is a “strategic positive.” They noted that Cimatron Ltd. (NASDAQ:CIMT) is focused on traditional manufacturing with 40K seats is using its software per management as of 2010. It has a global direct and reseller distribution coverage, which the analysts believe could be a key value for 3D Systems Corporation (NYSE:DDD) as it attempts to build its bureau and 3DP product platforms.
Eisner and his team maintained their Neutral rating for the shares of 3D Systems Corporation (NYSE:DDD) with a 12-month price target of $39 per share.
Deal will strengthen 3D Systems’ presence in Europe
On the other hand, Canaccord Genuity analyst Bobby Burleson and Prabhakar Gowrisankaran commented that the acquisition would strengthen 3D Sytems’ position to sell through metal 3D printers and it would also increase its presence in Europe.
The analysts have a Buy rating for the shares of 3D Systems Corporation (NYSE:DDD) with a $50 price target.