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3D printing company Stratasys to acquire Solid Concepts and Harvest Technologies to grow services business

3 April 2014

Stratasys Ltd., a leading global provider of 3D printing and additive manufacturing solutions, has entered into definitive agreements to acquire two privately-held companies, Solid Concepts Inc. and Harvest Technologies, both leading providers of additive manufacturing services.

The transactions are expected to be completed early in the upcoming third quarter, subject to customary closing conditions, and are expected to be accretive to Stratasys’ Non-GAAP earnings per share within the first 12 months after closing.

Upon completion of the transactions, Stratasys will combine Solid Concepts and Harvest Technologies with RedEye, Stratasys’ existing digital manufacturing service business, to establish one additive manufacturing services business unit. Joe Allison, President of Solid Concepts, will join the Stratasys management team and lead the combined parts business, supported by the strong management teams of Solid Concepts, Harvest Technologies, and RedEye.

Solid Concepts and Harvest Technologies provide Stratasys with significant manufacturing and end-use parts production capabilities, infrastructure, capacity and process know-how, which Stratasys expects will accelerate and enable further adoption of additive manufacturing. The combination of Solid Concepts’ deep knowledge of manufacturing and vertical focus, such as medical and aerospace, and Harvest Technologies’ experience in parts production, as well as materials and systems knowhow, together with RedEye, strengthens Stratasys’ direct digital manufacturing and parts production expertise.

Solid Concepts, based in Valencia, California, is an industry pioneer, having provided additive manufacturing solutions to customers since its founding in 1991. Solid Concepts has developed extensive US-based capacity and infrastructure with six US facilities staffed by approximately 450 employees.

Solid Concepts maintains a broad variety of technology platforms and processes for additive manufacturing and serves a diverse customer base across a wide range of verticals, including medical, aerospace, and industrial, among others. Solid Concepts provides an overarching platform that, with the integration of Harvest Technologies and RedEye, is expected to create a comprehensive additive manufacturing solution provider. Solid Concepts generated revenues of approximately $65 million in 2013.

Harvest Technologies, based in Belton, Texas, is a specialty additive manufacturing service bureau established in 1995, with approximately 80 employees. Harvest Technologies has deep manufacturing process know-how and focuses on advanced end use parts applications. Harvest Technologies was the first additive manufacturing company in North America to become AS9100/ISO 9001 certified, and continues to produce end-use parts for multiple industries.

Under the terms of the definitive agreement with Solid Concepts, Stratasys will acquire Solid Concepts for total consideration of up to $295 million, including a payment on closing of $172 million (or, if settled in cash, part on closing and part six months after closing), deferred payments of $60 million and up to $63 million in retention-related payments. Subject to certain requirements for cash payments, Stratasys retains discretion to settle any of the amounts payable under both the definitive agreement and the retention plan in either Stratasys shares, cash or any combination of the two. The value of a portion of the purchase price as well as the deferred and retention-related payments may increase or decrease in line with the market price of Stratasys shares.

Under the terms of the definitive agreement with Harvest Technologies, Stratasys will acquire Harvest Technologies for an undisclosed amount, including retention-related payments, payable in cash, shares or a combination thereof.

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