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3D Systems to Acquire Cimatron for $97M, Shares Gain

3D Systems Corporation (DDD) recently reported that it has signed a definitive agreement to acquire one of the leading CAD/CAM software solutions providers, Cimatron Ltd. (CIMT). The news was received warmly by investors as the stock rose nearly 6.7% in yesterday’s session. The transaction, valued at about $97 million or $8.97 per Cimatron’s share, is likely to be closed by the first quarter of 2015.

Cimatron specializes in offering comprehensive yet cost-effective solutions for 3D CAD/CAM software products including molds, tools and dies for use in manufacturing sector. The company has two primary product lines, CimatronE and GibbsCAM.

CimatronE primarily caters to toolmakers and discrete part manufacturers by providing the required CAD/CAM solutions. GibbsCAM has expertise in providing efficient and simple solutions for programming multi-axis CNC machine tools in the CAM industry.

3D Systems expects to generate strong operational and financial synergies from this acquisition, as addition of Cimatron to its product portfolio will significantly enhance its product and technological development. Cimatron will also augment 3D Systems’ coverage and marketing capabilities by extending direct and reseller sales.

3D Systems expects this acquisition to be immediately accretive to its cash flow and non-GAAP earnings. In the third quarter of 2014, Cimatron reported revenues of $11.2 million and adjusted earnings per share of 11 cents. On the other hand, this acquisition will also benefit Cimatron by stepping up its growth level through a stronger presence in the 3D industry.

3D Systems remains persistently focused on driving growth both organically and via acquisitions. Recently, the company launched a number of products including 3DSPRINT – a Shared Cloud and Desktop Platform, Capture Mini – a scan-based design and inspection solution and 3DMe Photobooth solution, among others.

The company has been consistently strengthening its position in the Design and manufacturing business which reported year over year revenue growth of 27% at $155.2 million in the recently reported third-quarter results.

The latest acquisition will further equip the company to solidify its place in the rapidly growing 3D industry amid a stiff competition from peers like Stratasys Ltd. (SSYS).

Currently, 3D Systems carries a Zacks Rank #4 (Sell). A better-ranked stock in the industry is Apple Inc. (AAPL), which sports a Zacks Rank #1 (Strong Buy).

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