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APPLE ACQUIRING 3D SYSTEMS
Mergers & Acquisitions
Kiki AmadiMeksduru, Anthony Terzian, IsalineCharpentier&Racha Ismail
13th
June, 2013
Group Assignment
Apple and 3D Systems Corporation
Companies overview:
Apple
Apple is a corporation founded in January 1977. It designs, manufactures and markets mobile
communication and media devices. In addition, the company commercializes different services,
software, networking solutions and third party digital content and applications. Apple sells its product
worldwide through its retail stores as well as online store, direct sales force and third party resellers.
The company recently acquired WiFiSlam, a Silicon Valley startup that does mapping applications for
Smartphones.
3D System
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.
Organizational Structure
Apple
"At apple they really are after you", was the perception of an employee as to the working culture of the
organization. The boss is noted for pushing his employees harder than anywhere else, and once he fired
an employee in the elevator for not giving a good enough answer to his question ‘so what have you
done for Apple lately?” 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. The corporate headquarters makes policies and oversaw all activities, but the local employees
make the day-to-day decisions on ground in countries all over. Their top down philosophy allows for
quick responsiveness and resolution to situations without involving the corporate headquarters.
Moreover, the following points can summarize their organizational culture:
1: design is everything
2: design reports to the CEO
3: a very small team designs their products
4: designers make the design decisions
5: they do pixel perfect mockups
6: they have paired design meetings
7: they do no market research
8: if it's not perfect, it doesn't go out.
3D Systems Corporation
3D systems' culture is customer oriented. 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. From the
manager of customer communications in service, he quotes: "My goal is to increase and promote cross-
functional communications, not only between our customers, and the Global Customer Success Team,
but among all departments within 3D systems. I am certain that my background in 14 years of
experience in sales will provide the team with an increased in the standing of the market place,
customers' needs and efficient processes to support our company's number one priority-improving our
customer's bottom-line."
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 demand for inkjet printers and PC free printers, which
take flash memory cards used in digital camera, continues to rise. The printing industry has seen the
pace of progress pick up due to digital technology. Moreover, the demand for 3D prototypes and
another printing material is increasing;as Amazon.com is interested to add a segment in their portfolio
dedicated to the 3D printing since it is an asset for designers.
From the information obtained, we believe that Apple acquiring 3D Systems Corporation will create
good opportunities for future business development. As we familiarize with both companies, it
appeared to us that our first insight on the deal was the right one. We will now see in more details how
both companies could work together.
SWOT analysis of 3D Systems:
Strengths:
1) 3D systems’ biggest strength is 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 productsto
improve their addictive manufacturing portfolio.
3) They help cut customers cost by reducing their production lines while increasing their output role by
enabling them produce single items quickly and cheaper rather than export abroad for rare parts.
Weaknesses:
1) 3D systems’ 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.
Opportunities:
1) The increasing demand from growing markets such as China and Indiapaired with 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 decreases and their speed increases there will be a surge in demand and
manufacturers will look to adapt the technology since 3D allows for the creation of parts in shapes that
conventional technique cannot achieve.
Threats:
1) The major threat is expanding too fast and becoming too diversified within the industry.
2) Staying on top of the industry and being able to compete with startup firms and other businesses that
could affect their revenue or gross profit margin might be difficult on the long term.
3) There is always a threat that the established technique of mass manufacturing will not go away and
that they cannot interrelate with 3D printers.
4) If the technology does not improve then the cost of 3D printing machine will not lower to a respectful
price.
Costs of proceeding with the 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.
In addition, if we take into consideration the fact that 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.
Apple platform strategy would lead to reducing cost in R&D for since 3D Systems since their design is
incremental.
Strategy and terms of process:
As mentioned in the description section of 3D systems, the company is aiming at broadening their target
audience by not only reaching experts, but also individual users. This strategy fits well with Apple’s
positioning. Furthermore, 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.
If Apple and 3D Systems merge, we would suggest that the printers produced would go under Apple’s
branding system when targeted to individual users. However, we would advise that the 3D Systems
brand name remains when dealing with professionals. This is because changing to Apple would mean
losing the professional image that 3D Systems has developed until now to the fashionable side of
Apple. Furthermore, in order to retain 3D Systems’ actual customers, current printers should remain
under the same design, however, Apple’s logo would be printed on them.
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.
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

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Evaluation of both companies

  • 1. APPLE ACQUIRING 3D SYSTEMS Mergers & Acquisitions Kiki AmadiMeksduru, Anthony Terzian, IsalineCharpentier&Racha Ismail 13th June, 2013 Group Assignment
  • 2. Apple and 3D Systems Corporation Companies overview: Apple Apple is a corporation founded in January 1977. It designs, manufactures and markets mobile communication and media devices. In addition, the company commercializes different services, software, networking solutions and third party digital content and applications. Apple sells its product worldwide through its retail stores as well as online store, direct sales force and third party resellers. The company recently acquired WiFiSlam, a Silicon Valley startup that does mapping applications for Smartphones. 3D System 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. Organizational Structure Apple "At apple they really are after you", was the perception of an employee as to the working culture of the organization. The boss is noted for pushing his employees harder than anywhere else, and once he fired an employee in the elevator for not giving a good enough answer to his question ‘so what have you done for Apple lately?” 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. The corporate headquarters makes policies and oversaw all activities, but the local employees make the day-to-day decisions on ground in countries all over. Their top down philosophy allows for quick responsiveness and resolution to situations without involving the corporate headquarters. Moreover, the following points can summarize their organizational culture:
  • 3. 1: design is everything 2: design reports to the CEO 3: a very small team designs their products 4: designers make the design decisions 5: they do pixel perfect mockups 6: they have paired design meetings 7: they do no market research 8: if it's not perfect, it doesn't go out. 3D Systems Corporation 3D systems' culture is customer oriented. 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. From the manager of customer communications in service, he quotes: "My goal is to increase and promote cross- functional communications, not only between our customers, and the Global Customer Success Team, but among all departments within 3D systems. I am certain that my background in 14 years of experience in sales will provide the team with an increased in the standing of the market place, customers' needs and efficient processes to support our company's number one priority-improving our customer's bottom-line." 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 demand for inkjet printers and PC free printers, which take flash memory cards used in digital camera, continues to rise. The printing industry has seen the pace of progress pick up due to digital technology. Moreover, the demand for 3D prototypes and another printing material is increasing;as Amazon.com is interested to add a segment in their portfolio dedicated to the 3D printing since it is an asset for designers.
  • 4. From the information obtained, we believe that Apple acquiring 3D Systems Corporation will create good opportunities for future business development. As we familiarize with both companies, it appeared to us that our first insight on the deal was the right one. We will now see in more details how both companies could work together. SWOT analysis of 3D Systems: Strengths: 1) 3D systems’ biggest strength is 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 productsto improve their addictive manufacturing portfolio. 3) They help cut customers cost by reducing their production lines while increasing their output role by enabling them produce single items quickly and cheaper rather than export abroad for rare parts. Weaknesses: 1) 3D systems’ 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. Opportunities: 1) The increasing demand from growing markets such as China and Indiapaired with 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 decreases and their speed increases there will be a surge in demand and manufacturers will look to adapt the technology since 3D allows for the creation of parts in shapes that conventional technique cannot achieve. Threats: 1) The major threat is expanding too fast and becoming too diversified within the industry. 2) Staying on top of the industry and being able to compete with startup firms and other businesses that could affect their revenue or gross profit margin might be difficult on the long term.
  • 5. 3) There is always a threat that the established technique of mass manufacturing will not go away and that they cannot interrelate with 3D printers. 4) If the technology does not improve then the cost of 3D printing machine will not lower to a respectful price. Costs of proceeding with the 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. In addition, if we take into consideration the fact that 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. Apple platform strategy would lead to reducing cost in R&D for since 3D Systems since their design is incremental. Strategy and terms of process: As mentioned in the description section of 3D systems, the company is aiming at broadening their target audience by not only reaching experts, but also individual users. This strategy fits well with Apple’s positioning. Furthermore, 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. If Apple and 3D Systems merge, we would suggest that the printers produced would go under Apple’s branding system when targeted to individual users. However, we would advise that the 3D Systems brand name remains when dealing with professionals. This is because changing to Apple would mean losing the professional image that 3D Systems has developed until now to the fashionable side of Apple. Furthermore, in order to retain 3D Systems’ actual customers, current printers should remain under the same design, however, Apple’s logo would be printed on them.
  • 6. 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. 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