GE Plans to Invest $1.4B to Acquire Additive Manufacturing Companies, Arcam and SLM

By Craig Resnick

Category:
Acquisition or Partnership

GE, a leading global digital industrial company, announced plans to acquire two suppliers of additive manufacturing equipment, Arcam AB and SLM Solutions Group AG for $1.4 billion. Both companies will report into David Joyce, President & CEO of GE Aviation. Joyce will lead the growth of these businesses in the additive manufacturing equipment and services industry. In addition, he will lead the integration effort and the GE Store initiative to drive additive manufacturing applications across GE.

GE expects to grow the new additive business to $1 billion by 2020 at attractive returns and also expects $3-5 billion of product cost-out across the company over the next ten years.

Arcam AB, based in Mölndal, Sweden, invented the electron beam-melting machine for metal-based additive manufacturing, and also produces advanced metal powders. Its customers are in the aerospace and healthcare industries. Arcam generated $68 million in revenues in 2015 with approximately 285 employees. In addition to its Sweden site, Arcam operates AP&C, a metal powders operation in Canada, and DiSanto Technology, a medical additive manufacturing firm in Connecticut, as well as sales and application sites worldwide.

SLM Solutions Group, based in Lübeck, Germany, produces laser machines for metal-based additive manufacturing with customers in the aerospace, energy, healthcare, and automotive industries. SLM generated $74 million in revenues in 2015 with 260 employees. In addition to its operations in Germany, SLM has sales and application sites worldwide.

Arcam and SLM will bolster GE's existing material science and additive manufacturing capabilities. GE has invested approximately $1.5 billion in manufacturing and additive technologies since 2010. The investment has enabled the company to develop additive applications across six GE businesses, create new services applications across the company, and earn 346 patents in powder metals alone. In addition, the additive manufacturing equipment will leverage Predix and be a part of the Brilliant Factory initiative.

The additive effort will utilize GE's global ecosystem, but be centered in Europe. GE will maintain the headquarters locations and key operating locations of Arcam and SLM, as well as retain their management teams and employees. These locations will collaborate with the broader GE additive ecosystem, including the manufacturing and materials research center in Niskayuna, New York, and the additive design and production lab in Pittsburgh, Pennsylvania. They will also complement the technologies brought on by other key acquisitions, such as Morris Technologies and Rapid Quality Manufacturing.

Each acquisition is structured as a public tender offer for all of the outstanding shares of stock of each company. The closing of each public tender offer is subject to various conditions, including minimum acceptance thresholds and regulatory approvals. GE is in the process of making the necessary filings with authorities with respect to such tender offers, and, upon approval, the documents will be made publicly available.

Additive manufacturing (also called 3D printing) involves taking digital designs from computer aided design (CAD) software, and laying horizontal cross-sections to manufacture the part. Additive components are typically lighter and more durable than traditionally-manufactured parts, because they require less welding and machining. Because additive parts are essentially "grown" from the ground up, they generate far less scrap material. Freed of traditional manufacturing restrictions, additive manufacturing dramatically expands the design possibilities for engineers.

Keywords: Additive Manufacturing, Electron Beam Melting, 3D Printing, Computer Aided Design (CAD), ARC Advisory Group.

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