3D Systems has acquired Xerox's solid ink engineering and development teams, development labs and relevant patent portfolio for $32.5 million in cash. The company expects the acquisition of these highly specialised printer design and material science teams together with their labs and relevant IP to catapult its printers' development and manufacturing capabilities a full decade forward and to substantially accelerate its revenue
growth-rate over time.
"This bold step is consistent with our belief that we must act quickly and decisively to extend and cement our marketplace leadership position and leverage unique opportunities to bring affordable, high performance new products to market years ahead of what would have been possible to accomplish organically," said Avi Reichental, 3D Systems' President and CEO.
As part of this agreement, 3DS added more than 100 experienced Xerox engineers and contractors specialising in product design and materials science to its global R&D team and plans to immediately begin to operate its own facility within the Xerox Wilsonville campus.
In connection with this strategic investment, 3DS expects to increase its annual R&D expenditures over the next few years by approximately 75% to 100% from its full-year 2013 R&D expense as it completes certain Xerox related engineering services commitments and fully leverages its expanded capabilities, and expects to realise net revenue benefits by the fourth quarter of 2014.
"The stronger our marketplace leadership, the more powerful our economic model becomes," continued Reichental. "Simply put, a solidified position translates directly to higher revenue, higher profitability and greater earnings power over time and we are willing to sacrifice short term earnings to get there faster."
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