3D Systems Continues Consolidation: Sells Service Business

By on June 1st, 2021 in Corporate, news

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3D Systems Continues Consolidation: Sells Service Business
3D Systems will be a bit smaller after their divestiture announcement

3D Systems announced a massive divestiture of their worldwide 3D print service business.

3D Systems’ blockbuster announcement has the company selling their their On Demand Manufacturing business to private equity firm Trilantic North America for the sum of US$82M. The deal is expected to close later this year.

Trilantic is expected to use the brand name “Quickparts” for their new acquisition, the same name used for many years by 3D Systems. This will certainly aid in customer recognition in the future.

Why sell the parts business? 3D Systems explained:

“As with the divestitures announced earlier this year, by taking this action 3D Systems can more effectively focus on its strategic purpose as the leader in enabling additive manufacturing solutions for applications in growing markets that demand high-reliability products. 3D Systems will continue its collaboration with Quickparts after the sale closes to support shared customers.”

This move is part of a larger pattern, where 3D Systems is finally ditching a series of peripheral businesses acquired during years of buying under previous management. According to our research in 2015, 3D Systems had acquired 54 companies during the 2001-2015 period. After 2015, there were even more acquisitions.

3D Systems’ worldwide parts business, comprising of operations located in Lawrenceburg, Tennessee; Seattle, Washington; Le Mans, France; Pinerolo, Italy; and High Wycombe, England, was partially built on prior acquisitions of smaller operations. In some cases, regional operations were acquired and then later consolidated. Ironically, the business built by acquisitions is now deacquired.

The most typical reasons for divestiture of a line of business are:

  • Desperate need for cash solved by selling a profitable business
  • Removal of a money sink by selling a losing business
  • Lack of focus due to too many operations solved by shedding businesses

The first two are not likely the case here, as 3D Systems isn’t in desparate need for cash, at least at the moment, nor, we believe, is their parts business unprofitable.

The truth is quite likely exactly what they say: they need to focus on their core business, and the best way to do so is by jetting out anything that’s “distant” from core activities.

Even better in this case, 3D Systems will receive a good chunk of cash for those operations.

3D Systems’ President and CEO, Dr. Jeffrey Graves, said:

“We are continuing to aggressively execute our four-phase plan that we announced a year ago, to position the company for exciting growth and profitability as the market for industrial-scale additive manufacturing continues to expand. The On Demand Manufacturing business, with its focus on the rapid production of components using a multitude of digital manufacturing methods, is a solid business that has a very bright future under the stewardship of Trilantic North America. Our sole reason for divestiture is to enable our entire focus and investment priorities to be on additive manufacturing (AM), where we play a unique leadership role in enabling industrial-scale AM adoption across a range of exciting end markets.

We will continue to collaborate with the Quickparts business as it relates to additive manufacturing and are confident that, with the focus this brings to both organizations, the future will be bright for all stakeholders. With a very strong balance sheet and cash position, proceeds from the sale will be used to further accelerate our investments for growth in our core additive manufacturing capabilities, for which we are seeing rapidly rising demand in new, extraordinary applications ranging from the human body to electric vehicles and space travel.”

These days it’s critically important for 3D print technology to be hard-linked to vertical applications, and when Graves mentions “the human body”, he means the healthcare vertical. 3D Systems has been deeply involved in that sector for years, and it’s become one of their prime growing applications.

With the freedom from operating services and some new cash, I’m now expecting 3D Systems to dig even deeper into the healthcare sector. Their recent acquisitions in bioprinting technologies hint at much bigger things to come.

Via 3D Systems

By Kerry Stevenson

Kerry Stevenson, aka "General Fabb" has written over 8,000 stories on 3D printing at Fabbaloo since he launched the venture in 2007, with an intention to promote and grow the incredible technology of 3D printing across the world. So far, it seems to be working!

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