Align Technology (NASDAQ:ALGN) is buying a private company based in Germany called exocad Global Holdings for approximately 376 million euros ($419 million). exocad sells dentistry-related software for computer-aided design/computer-aided manufacturing (CAD/CAM) in over 150 countries, where it has sold more than 35,000 licenses to its software.
Dentists use CAD/CAM software to help create a wide array of dental products, from crowns and bridges to Align Technology's bread and butter: orthodonics.
Align's CEO Joe Hogan said in a statement announcing the deal that dentistry is "evolving digitally, with technology advances and consumer awareness driving new opportunities in ortho-restorative and comprehensive treatment."
Align is intimately familiar with exocad. The companies have been collaborating since 2017, when Align's iTero intra-oral scanners were set up to send data to exocad's Chairside CAD software. The partnership later expanded to allow dentists to mill dental restoration products on their milling machines.
The healthcare company plans to keep exocad intact, with the co-founders, Tillmann Steinbrecher and Maik Gerth, remaining with the company. They will report to Align's chief financial officer, John Morici.
"We will continue to invest in and build on exocad's leadership in the dental CAD/CAM market and look to them to make significant contributions to Align's overall strategy," Morici said.
Align noted that the addition of exocad, which is expected to close in the second quarter of this year, will increase its gross margins, but the purchase will reduce the company's earnings per share this year due to acquisition-related costs.