The 3-D Printing IPO That Will Shock the Market
3-D printing investors will soon have a new stock to follow and perhaps invest in. There are two things you need to know upfront: The first is that the company is voxeljet AG, with a small letter “v.” The second is that the IPO on the New York Stock Exchange will almost certainly be big.
This article will look at why I believe the voxeljet IPO will be successful, and provide a brief history and overview of the company, their technology and patents, products and services and some key financials from the recent F-1 filing, including management’s discussion. I’ll conclude by listing several key competitive advantages that I see in the company as an investor.
Estimates for a CAGR (compound annual growth rate) in 3-D printing between 25-30% for the next five years are common by industry experts, analysts and insiders.
Pricing of the IPO with lead underwriters Piper Jaffray and Citigroup has not been set at this time and will depend in part upon the level of interest from institutional and accredited investors. I believe that level of interest will be high for three reasons: advances in 3-D printing, projected strong industry growth and the market niche voxeljet occupies within the industry.
Although 3-D printing (also called “additive manufacturing”) has been around for 20 years or so in various forms, advances in technology and the addition of new materials have brought the industry to an inflection point. 3-D printing is now moving from prototyping to larger-scale manufacturing that provides savings in both time and cost. With new technologies available, NASA is now 3-D-printing rocket injectors for less than half the previous cost, and has cut production times from six months to three weeks. This type of industry progression is being seen across the globe in 3-D printing and is one reason why I’m expecting a robust subscription in the IPO.
While it is true there’s been some media hype about 3-D printing, industry experts who’ve been around additive manufacturing for years are bullish on forward growth. Estimates for a CAGR (compound annual growth rate) in 3-D printing between 25-30% for the next five years are common by industry experts, analysts and insiders. Terry Wohlers, a leading industry consultant, speaker and publisher of Wohlers Report 2013, notes that the market for 3-D printing in 2012, consisting of all products and services worldwide, grew at a CAGR of 28.6% to $2.2 billion and is expected to hit $4 billion in 2015 and approach $6 billion by 2017.
Voxeljet printer systems and services are aimed squarely at commercial applications in the automotive, architecture, aerospace, medical/orthopedic, engineering and defense industries. These industries are expected to benefit the most from 3-D printing, thereby creating increasing demand going forward. In an interview I conducted with Terry Wohlers for Engineering.com, he explained that the vast majority of revenue from products and services will continue to come from industrial systems. Revenues from personal 3-D printer sales in 2012 were only 6.5% of the total market for additive manufacturing/3-D printing systems. While the personal 3-D printer market has grown very quickly in the past five years, it’s still small compared with the industrial systems.
Now let’s take a look under the hood of voxeljet with a brief company overview, the company’s technology and patents, products and services and some key financials from their recent form F-1 filing. I’ll conclude by listing several key competitive advantages and growth drivers that I see in the company.
Voxeljet began in 1999 under the name Genesis GmbH. In 2004, the name was changed to “Voxeljet Technology GmbH” (with a large V at the time) and ultimately became “voxeljet AG” this year. “AG” is the abbreviation for Aktiengesellschaft, which is German for a corporation owned by shareholders and can trade in a stock market.
Voxeljet’s principal offices are located in Friedberg, Germany, about 60 km northwest of Munich. The company sold their first 3-D printer in 2002, has installed 52 printers worldwide as of June 30 of this year and received some fame in 2012 for fabricating stunt-double Aston Martin cars used in the James Bond action flick Skyfall.
The company’s production facilities now stand at 16,000 square feet and are undergoing expansion to over 40,000 square feet. Proceeds from the IPO are for the establishment of new service centers in North America and Asia, research and development, sales and marketing initiatives and “general corporate purposes including potential acquisitions.”
Approximately 53% of sales to date have been outside of Germany, and major customers include Ford Motor Co., The 3M Co., Daimler AG, BMW and Hyundai. 3D Systems Corp. (DDD) has also been a distributor of voxeljet printers since 2011. voxeljet is much smaller in terms of revenue generation than other 3-D printing companies.
To be continued…
Ed. Note: 3-D printing is the next major growth industry, and if you’re not exposed to it yet, you definitely risk missing out. That’s why today’s Tomorrow in Review email edition gave readers a shot at discovering 3 more stocks that stand to make huge gains as the 3-D printing revolution comes into the mainstream. If you didn’t get that email, not to worry. They’ll be back tomorrow with the second half of this essay and another shot at that same opportunity. Don’t wait. Sign up for FREE, right here.