Apr 7, 2016 | By Alec
It looks like PyroGenesis, the leading Canadian plasma waste-to-energy systems and plasma torch manufacturer, sees a bright future ahead for metal 3D printing. The Canadians only just entered the 3D printing industry six months ago for the production of 3D printable metal and alloy powders, and now already see enough potential in that side business to set up a separate and independent, currently still unnamed, company. In a press release, the company just revealed that their Board of Directors unanimously approved their plans to spin-off 80% of their 3D printing business into that new publicly-traded company.
For those of you who’ve never heard of them, PyroGenesis Canada is a leading clean-tech company that specializes in the development and production of advanced plasma processes, with clients coming from a very wide range of industries, including defense, mining, oil & and gas and metallurgy. With a huge office in Montreal, they are constantly looking for innovative plasma applications and high-temperature metallurgical processes. Last year, this led them to the 3D printing market, and they invested a total of $1.7 million in a 3D printable powder production facility.
But those ambitions were hardly realized, before the plans were radically changed. The new company, that is so far only referred to as ‘3DCo’ (will be changed in the near future), will be essentially be an independent version of the department PyroGenesis was working on. “3DCo will have all rights to (i) produce metal and alloy powders for the Additive Manufacturing (3D Printing) industry using PyroGenesis' patented technology and (ii) to distribute powder production systems and equipment under an exclusive world-wide license with PyroGenesis,” the company reveals.
But of course PyroGenesis is set to benefit significantly. The parent company will continue to benefit from supplying systems and equipment and provide standard maintenance and technical support services for all purchased material, for up to $750K per system per year. They will also sign a non-compete agreement, while PyroGenesis will receive royalties of up to ten percent of production revenues. “This Transaction is expected to be staged over the next four (4) months, at which time PyroGenesis' shareholders will own and control all the issued and outstanding shares of both companies,” they say. The idea is that this unnamed company will be in commercial production by the third quarter of this year, with a second system being taken into production in Q1 2017.
The company will thus essentially rely on PyroGenesis technology for all of its work, which has been described as having the ability to revolutionize metal 3D printing through their innovative and new powders. It is also particularly flexible in use, and can be adjusted to process a wide variety of metals and composites. “Our plasma atomization system produces powders of the highest purity, while being extremely spherical, and having a very narrow particle size distribution, making it ideally suited for the powder requirements of the growing 3D printing industry,” said Mr. Pierre Carabin, Director of Engineering of PyroGenesis. “Building on our history of providing such powders to the biomedical industry (since before 2004), combined with our developed expertise and know-how in metal powder production, our team of engineers have recently made significant improvements to our current technology, laying down the groundwork for future success.”
But if the technology is so great, why not keep all the profits in-house? Well, it seems that PyroGenesis is very optimistic about where metal 3D printing is heading, and feels they can make a bigger impact with an independent company. And in some respects, this could be absolutely true. According to a 2015 Wohlers report, the demand for 3D printable metal powders is set to increase exponentially over the next few years – with demand expected to increase to 8.6Mkg by 2020, worth $3.45 billion. Small, spherical, uniform, titanium powders, which will be a core product for 3DCo, will make up around 30% of that demand.
As the CEO of PyroGenesis, P. Peter Pascali, revealed, they believe a separate company would maximize shareholder value for that particular sector. “Spinning off 3DCo will help attract an investor base best suited to the company's unique value proposition, particular business operations and financial characteristics, thereby maximizing shareholder value and placing it in a better position to ramp up, generate revenues, and develop strategic relationships/partners than had it remained part of PyroGenesis,” he said. “As such, 3DCo will be able to sharpen its strategic focus and provide flexibility to capitalize on the unique growth opportunities within its market sector. At the same time, it will provide PyroGenesis with a source of repeat business and recurring revenues as well as an investment position in a vibrant public company.”
The process of setting up this company is still in its initial phase, with the transaction being reviewed by PyroGenesis and their accounting, legal and financial advisors. It is thus not entirely clear yet what form it will take. But Pascali was confident that it will be realized in time for Q3 2016. “The Board's decision to approve such a Transaction reflects PyroGenesis' ongoing commitment to implement bold changes to deliver sustainable growth and enhanced shareholder value,” he concluded.
Posted in 3D Printing Application
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