Stratasys acquires MakerBot for $403 million in stock

3D printer manufacturer Stratasys (s SSYS) will acquire Brooklyn, NY-based MakerBot, the companies announced today. Minnesota-based Stratasys is going to pay upto $604 million for MakerBot: $403 million in stock and another $201 million as an earn-out if MakerBot meets certain targets.

Under the terms of the merger agreement, Stratasys will initially issue approximately 4.76 million shares in exchange for 100% of the outstanding capital stock of MakerBot.  The proposed merger has an initial value of $403 million based on Stratasys’ closing stock price of $84.60 as of June 19, 2013. MakerBot stakeholders also qualify for performance-based earn-outs that provide for the issue of up to an additional 2.38 million shares through the end of 2014.  The proposed earn-out payments have an initial value of up to $201 million based on the Stratasys closing stock price as of June 19, 2013. Those payments, if earned, will be made in Stratasys shares or cash (in an amount reflecting the value of the Stratasys shares that would have otherwise been issued at the relevant earn out determination date), or a combination thereof, at Stratasys’ discretion. [Stratasys press release]

MakerbotReplicator2“The last couple of years have been incredibly inspiring and exciting for us,” MakerBot CEO and co-founder Bre Pettis said in a release.  “We have an aggressive model for growth, and partnering with Stratasys will allow us to supercharge our mission to empower individuals to make things using a MakerBot, and allow us to bring 3D technology to more people.”

Makerbot produces the popular Replicator 3D printers, which are relatively inexpensive and aimed at desktop users. The company has sold more than 22,000 3D printers since its founding in 2009. It will continue to operate under its own name and produce products distinct from Stratasys.

Makerbot recently opened a 50,000-square-foot factory in Brooklyn and plans to nearly double their staff this year. The company has received a modest $10 million in venture capital funding from companies including Foundry Group and True Ventures (see disclosure).

Stratasys was founded in 1989 and merged with another 3D printer company, Objet, last year. It focuses on industry-oriented printers. Researchers recently used a Stratasys machine capable of printing with two types of polymer to produce a fracture-resistant material inspired by bone.

Disclosure: True Ventures is an investor in Makerbot and the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.