Today General Electric announced plans to acquire two metal 3D printing companies, Arcam and SLM Solutions.
Sweden-based Arcam uses a unique electron beam process to selectively sinter metal powder and has proven a popular choice among industrial metal 3D printing users.
Germany-based SLM Solutions also produces powerful metal 3D printing equipment that use their Selective Laser Melting system (hence their name), which can use multiple powerful lasers to selectively sinter layers of metal powder.
Both companies market a selection of metal powders for use in their equipment, and Arcam also operates a metal powder manufacturing operation in Canada.
The deal involves a total purchase amount of USD$1.4B between the two companies. It’s dependent on a minimum number of shareholders of each company agreeing to the deal, after which GE would fully own both companies.
GE explains that the two companies will retain their headquarters and staff in their Sweden and Germany locations, but work closely with GE’s “additive manufacturing ecosystem”, which includes a materials research center in New York state, and their additive design and production lab in Pittsburgh.
GE has been a major user of metal 3D printing technology for quite a few years. Three years ago they were one of the first to produce a prototype jet engine using metal 3D printing equipment. More recently, GE Ventures was among a group of investors that pushed USD$52M into Desktop Metal, another metal 3D printing startup. (Coincidentally, one of Arcam’s senior staff just moved over to Desktop Metal). It’s clear that GE is very serious about building capabilities with metal 3D printing.
Why buy TWO metal 3D printer companies? It’s because these two companies offer different 3D printing processes, each applicable in different manufacturing situations. GE is attempting to cover all the bases. Well, at least two of them, anyway.
For others in the 3D printing space, this is a blockbuster announcement that will generate multiple effects.
One is that the purchase may temporarily cause a jump in 3D printing stock prices, as the market may feel there’s a start to a buying frenzy.
Another is that the two metal 3D printing companies being acquired were quite small and thus capital-constrained. That is no longer the case as giant GE would be able to fund any venture they might consider. This move instantly makes Arcam and SLM Solutions much more powerful.
But in the long term, this may be bad news for Stratasys, the only major 3D printing company without a metal 3D printing option. My thought was that Stratasys would eventually purchase one of the independent metal 3D printer companies to bring them into their ecosystem, much as 3D Systems did years ago with the Phenix equipment. However, as of today there are two fewer options to purchase. And there’s not many others left.
Meanwhile, this is good news for Arcam and SLM Solutions. And especially their shareholders.