3D Systems announced the surprise acquisition of not one, but two companies this week. What’s going on?
Years ago the company went on a massive buying spree, gobbling up at least 54 different companies over the course of several years. Many of these acquisitions were questionable, and most of the products involved have now faded away. Similarly, the acquisition strategy disappeared from 3D Systems’ playbook until very recently.
The companies in question were Kumovis, a German startup that provides a system for 3D printing high temperature materials in a medically-certifiable manner, and Titan Robotics, a Colorado firm specializing in large-format 3D printing using thermoplastic extrusion technology.
Kumovis’ R1 system is unique in that exotic materials are typically used for medical equipment and implants, which must undergo sterilization in high temperature sterilizer units. Most of the commonly used thermoplastics in 3D printing would not survive those temperatures, but the R1’s ability to print high temperature materials such as PEEK, PEKK and PPSU easily overcomes that challenge.
The company has also developed a sophisticated workflow and ecosystem to support the “clean room” 3D printing process enabled by their technology. One of their goals is to decentralize the production of medical parts by enabling onsite production using their systems.
Given 3D Systems’ strong focus on the healthcare sector, it is not a surprise they have acquired Kumovis. This will immediately add a new product line to their growing healthcare business, but also allow for significant growth.
Kumovis, as a small startup, simply didn’t have the marketing and distribution power that 3D System operates. 3D Systems will be able to easily plug Kumovis product directly into their distribution network and immediately gain significant sales.
On the other side we have Titan Robotics. I’m reluctant to term them as a startup, as I first saw them way back in 2015 when they launched their at the time unprecedented large-format FFF 3D printer, the Atlas.
Since then the company has gradually improved the system, most importantly adding the ability to extrude using inexpensive thermoplastic pellets rather than expensive filament.
This was a very important move for the company, because when 3D printing larger objects the cost of filament can be extreme. The shift to pellets enabled operators to print large objects with material expense similar to conventional manufacturing processes.
Titan Robotics was also among the first to use servo motors in their machine design, rather the the much more commonly found stepper motors. These servos enabled real time control to ensure the motion system was precisely positioned at all times. In other words, better quality prints.
While the Kumovis acquisition was a natural step for 3D Systems, the Titan Robotics move is a bit more subtle. 3D Systems already has large format 3D printers, but they are SLA systems, not thermoplastic. What are they doing with this move?
My suspicion is that they see the large format market as a potential growth area. This fact has already been discovered by a few others in that space, most notably with BigRep. The Berlin-based company has been making a lot of business with their powerful large format devices for several years, and seems to have found a market in industry. There is a need for producing large-scale prototypes in certain industries. BigRep has shown examples of bathtubs, marine propellors and similar large objects that require testing before committing to full scale production.
It is this market that I believe 3D Systems is working towards with the Titan Robotics acquisition. Like Kumovis, 3D Systems will be able to leverage their existing reseller network to push the large format technology far further than Titan Robotics would ever been able to on their own.
It’s also likely bad news for BigRep and similar large format 3D printer manufacturers, as they now have a powerful competitor with a lot of reach and plenty of cash.
It should be interesting to see the effect of these moves on 3D Systems’ valuation in our weekly leaderboard of the largest 3D print companies.
My thought is that 3D Systems now believes they have “cleaned up” their operations and now are once again looking outwards. Their current position as the highest valuation 3D print company provides them the platform on which they can easily make strategic acquisitions of this type.
Via 3D Systems