Last week 3D Systems did something unusual: they sold off 7,500,000 shares of their stock at a price of USD$40 each. Around 17.5% of these shares were held by “certain selling stockholders”, while the rest were owned by 3D Systems itself. This raised company coffers by a massive USD$300M.
Companies just don’t do this for fun. They do it to raise money to spend on something.
What costs USD$300M?
We suspect they’re shopping for another company, as does a report in Seeking Alpha. The report by contributor Mikko Dahlbom suggests 3D Systems could benefit by picking up Swedish Arcam AB, currently with a market capitalization at over USD$1B according to Google. The USD$300M would go a long way to purchasing a big chunk of Arcam, especially when combined with stock swaps or other arrangements.
But why Arcam? Arcam’s technology portfolio includes “Electron Beam Melting” for 3D printing metal, a technology (and material) not currently available to 3D Systems. 3D Systems is well known for their strategy of holding patents for as many 3D printing processes as possible, and this theoretical acquisition would support that strategy. Arcam’s slogan, “From CAD to Metal”, could belong to 3D Systems soon.
Why now? A glance at Arcam’s stock price may tell the story. Their price continues to rise strongly and buying now would likely be less expensive than doing it in the future.