Tech Data, MakerBot Ink Distribution Deal - Analyst Blog

Recently, Tech Data TECD entered into a definitive one-year agreement with the leader in desktop 3D printing, MakerBot, a subsidiary of Stratasys SSYS.

MakerBot Industries is a New York-based developer of 3D printers, founded in Jan 2009 by Bre Pettis, Adam Mayer and Zach Smith. On Jun 19, 2013, Stratasys Incorporated acquired MakerBot for a stock deal worth $403 million.
 
Per the recent deal, Tech Data will act as a distribution partner and represent MakerBot 3D printing and scanning products exclusively within the 3D printing category during the tenure of the agreement.

Tech Data believes that this partnership will enable it to provide its reseller partners with a unique mix of cutting-edge products that meet the growing demands of end users. This, in turn, will expand their businesses and profitability in the channel going forward.

Per Gartner, worldwide shipments of 3D printers will rise 75.0% to 98,065 units in 2014 and almost double in 2015. IDC has predicted that the 3D printer market will experience a compound annual growth rate of 29.0% from 2012-2017.

We believe that with this partnership, Tech Data will be able to enhance end-user experience, which in turn will drive its growth and profitability.

We believe that the company's growing exposure to volatile European markets remains a concern. Moreover, Tech Data's not-so optimistic guidance will remain a headwind in the near term.

Nevertheless, Tech Data will benefit from stabilization in personal computers through the rest of 2014. Its partnership with Google (GOOGL) to distribute Chromebooks and VMware VMW to deliver VMWare VSphere ® 5 to its resellers, will drive its top line. Further, the company's improving execution (particularly in Europe), superior customer service and improving market share in the Americas are positives.

Currently, Tech Data has a Zacks Rank #3 (Hold).