Overall, 2013 M&A transaction volume is below 2012’s blowout. But, halfway through the year, the manufacturing & distribution industry is leading West Monroe’s 2013 transaction advisory, comprising 55% of deals.
As industry analysts and the stock market continue to “discuss” the sector’s health on a daily basis, US manufacturing has been experiencing a slow, but extended rebound for some time. And yet, the market remains increasingly competitive – with innovation and customer experience as key components to price differentiation globally. Locally, Stratasys, a Minnesota leader in innovation and manufacturer of professional-grade 3D printers, last week acquired MakerBot, the leader in consumer grade 3D printers. At a purchase price of about $430 million, the acquisition is certainly a “doubling down” on the future of 3-D printing success and it’s another strong example of how strategic acquisitions can make an immediate impact on the future of a business. Stratasys went from a B2B business into the B2C marketplace effectively overnight – the operational and technology implications of that are not to be overlooked. Coupled with the challenges we discussed in our recent article in Manufacturing Business Technology (here), the benefits of the deal can be quickly lost if proper diligence, integration planning and execution aren’t applied. Based on comments from the CEO, it appears Stratasys is taking a portfolio approach to the merger at this time, operating MakerBot as a standalone subsidiary for the time being, which is smart, as transforming their existing customer service capabilities to service a B2C market is no small task when customer experience is also at the forefront of industry differentiation. Is this consumer-oriented investment where the 3-D industry is headed and a hedge against their historical commercial focus? It’s hard to tell and it will be interesting to see how this acquisition delivers on expectations, but it takes bold and innovative moves to succeed.