APPLE AQUIRING 3D SYSTEMSMERGERS & ACQUISITIONS

JUNE, 2013

BY RACHA ISMAIL, ISALINE CHARPENTIER, KIKI AMADI MEKOMAM & ANTHONY TERZIAN

What is Apple?

Apple is a corporation founded in January 1977.

It designs, manufactures and markets mobile communication and media devices.

the company commercializes different services, software, networking solutions and third party digital content and applications. 

The company recently acquired WiFiSlam, a Silicon Valley startup that does mapping applications for Smartphones.

ORGANIZATIONAL STRUCTURE

The company is one that thrives on secrecy, gives obsessive attention to detail, and this approach is not conducive for friendliness.

Their culture is also referred to as tough as nails. In addition, their culture is one of change, with the drive to outperform and succeed as their major objective.

Their top down philosophy allows for quick responsiveness and resolution to situations without involving the corporate headquarters.

What is 3D SYSTEMS?

3D Systems Corporation is a holding company incorporated in Delaware and operates through several subsidiaries around the world.

They are the leading global providers of 3D content-2-print solutions including 3D printers, print materials, on demand custom services, and 3D authoring solutions for professionals and consumers.

They also provide scanners for a variety of medical and mechanical X-ray film digital archiving. Their 3D printers can print almost anything from personalized medical devices to functional airplane and car parts from individualized accessing to customized jewelry and toys.

3D PRINTING MODELS

ORGANIZATIONAL STRUCTURE

They attract and develop experts who are passionate about helping their customers succeed.

They identify and act on opportunities to create faster, simple processes that enhance their ability to serve customers and maintain competitive posture.

They are highly motivated in committing and doing their jobs.

They are guided by set of principles and values that cultivates teamwork, entrepreneurial spirit, cross-functionality, interaction, and responsibility.

Market Overview

The world printing machinery and supplies industry is expected to exceed 21 Billion dollars by 2015 according to global industry analysts.

The market is driven by demand for digital color presses, specialty printers, and inkjet printers.

The printing market has grown alongside expansion in the PC market, with many computer owners also owning printers.

The printing industry has seen the pace of progress pick up due to digital technology.

3D SYSTEMS - SWOTSTRENGTHS1) their recurring sales output from print materials and services revenue segments.2) they have a proven research and development department and are able to produce new products to improve their addictive manufacturing portfolio3) they help cut customers cost by reducing their production lines while increasing their output role by enabling them produce single items quickly and cheap rather than export abroad for rare parts.

WEAKNESSES1) their printers are very expensive to make which results in a high price for the machines and their end use products.2) Objects will become a lot easy to copy, distribute, and pirate, thus making it easier to breach intellectual property laws.

OPPORTUNITIES1)Their increasing demand from growth markets of China and India and 3D systems ability to speed up design process will have a big impact on the printing industry and may replace mass manufacturing.2) once the printers cost decrease and their speed increases there will be a surge in demand and manufacturers will look to adapt the technology, because 3D allows for the creation of parts in shapes that conventional technique cannot achieve.

THREATS1) Expanding too fast and becoming too diversified within the industry.2) staying on top of the industry and being able to compete with start up firms and other businesses that could affect their revenue or gross profit margin.3) The established technique of mass manufacturing will not go away and that they cannot interrelate with 3D printers.4) the technology does not improve and the cost of 3D printing machine do not lower to a respectful price.

Cost of Merger

Each company calculates its expenses in different terms. Apple’s expenses are covered through net sales while 3D systems’ expenses are covered through their total revenue. In order to evaluate the potential benefit of acquiring 3D Systems, Apple should either compare their results in terms of sales expenses or revenues. In terms of R&D, Apple spends 2% of its net sales revenues while 3D Systems spends 6.6% of their revenue so we can conclude that both companies have a healthy attitude in terms of expense expenditure.

Sales expenditures represent 34,1 % of 3Dsystems‘ revenues then we can say that getting together with Apple would be a positive deal because it would lead to economies of scales thanks to the fact that Apple has already well-established selling platforms.

Strategy

3D systems is aiming at broadening their target audience by not only reaching experts, but also individual users.

According to Apple Press Info, Apple announced changes to increase collaboration across hardware, software and services, which supports us to think that this deal could be a good one.

Terms of Process

we would suggest that the printers produced would go under Apple’s branding system when targeted to individual users.

we would advise that the 3D Systems brand name remains when dealing with professionals.

In order to retain 3D Systems’ actual customers, current printers should remain under the same design, however, Apple’s logo would be printed on it.

In terms of board of directors, 3D Systems, as of now, is authorized to issue 5 million shares of preferred stock and in addition to other rights, in order to keep the board of directors interested in the acquisition and not lose present stockholders, it is preferred to increase each share value by 5%. Furthermore, 3D Systems directors will have seats in Apple’s board of directors so that they can provide their input and be part of the decision process in terms of the company objective.

THANK YOU!!!QUESTIONS?

References

2013, June). Retrieved from Reuters: http://www.reuters.com/finance/stocks/companyProfile?rpc=66&symbol=AAPL.O

Apple. (2013). Retrieved from http://www.apple.com/pr/library/2012/10/29Apple-Announces-Changes-to-Increase-Collaboration-Across-Hardware-Software-Services.html

Faulk, T. (2013, June 10). Retrieved from smartplanet: http://www.smartplanet.com/blog/bulletin/amazon-launches-3d-printer-section/21522

reportlinker. (2013). Retrieved from http://www.reportlinker.com/ci02068/Printer-and-Copier.html

Systems, 3. (n.d.). Retrieved from http://www.3dsystems.com/company/investor/CorProf_13.pdf