On January 20, Proto Labs Inc (NYSE: PRLB) stock rose 6.56% to reach a closing price of $191.46. This resulted from the announcement that the company had acquired a platform called 3D Hubs that allows individuals or small businesses to order 3D printing services.
Proto Labs acquired 3D Hubs for $130 million in cash and $150 million in stock. Additional payments of $50 million over two years will also be payable based on operations performance. The Proto Labs deal costs a substantial amount but will hopefully enable the company to grow significantly.
3D Hubs provides a platform where clients can order 3D printed parts of any complexity. More and more companies are using 3D printing to speed up the prototyping and design process and produce unique products. 3D Hubs generates more than 25 million dollars in revenue and is growing rapidly.
Consequently, the acquisition could prove valuable for Proto Labs. It is expected that the company’s revenue growth rate will increase, which was 12% over the past five years. Revenue at 3D Hubs is growing about 17 times faster. Therefore, Proto Labs’ 3D-printing business will see an increase in its income due to the acquisition.
Besides, the 3D Hubs service falls under the general management of Proto Labs (PRLB), which creates complex small-scale products, prototypes for industries such as 3D printing, and several other things. There is a growing market, but the most important task for market players is to connect customers with manufacturers capable of providing solutions for projects with particular requirements. Having developed in this direction, Proto Labs is poised to become one of the leading players in the special engineering and manufacturing market.