Sep 6, 2016

GE (NYSE:GE), the world’s leading digital industrial company, today 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.

Mölndal, Sweden based Arcam AB is inventor of the electron beam melting machine for metal-based additive manufacturing. It also produces advanced metal powders with customers 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. GE is offering 285 Swedish crowns per share, or a total of 5.86 billion crowns ($685 million), for Arcam. The offer represents a premium of around 53 percent relative to Arcam's closing price on Monday.


SLM Solutions Group, based in Lübeck, Germany, produces laser machines for metal-based additive manufacturing. Its customers are 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. GE Aviation is offering shareholders EUR 38.00 in cash per share or a total of 683 million euros ($762 million), and SLM Solutions intends to support the envisaged takeover offer. If the takeover offer is successful, 31.5 % of the company's shares, which are currently held by existing shareholders, will be transferred to GE Aviation: The Chairman of the Supervisory Board Hans-Joachim Ihde currently holds around 24.1 % of the 17,980,867 SLM Solutions shares via Ceresio GmbH. Executive Board member Henner Schöneborn and his family currently hold shares of approximately 2.0 %. Further, Parcom Deutschland I GmbH & Co. KG holds approximately 5.4 % of the shares in SLM Solutions Group AG.

“Additive manufacturing is a key part of GE’s evolution into a digital industrial company," said Jeff Immelt, Chairman and CEO of GE. "We are poised to not only benefit from this movement as a customer, but spearhead it as a leading supplier. Additive manufacturing will drive new levels of productivity for GE, our customers, including a wide array of additive manufacturing customers, and for the industrial world.”

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 our Brilliant Factory initiative.

According to the company, Arcam and SLM will bolster GE’s existing material science and additive manufacturing capabilities. 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.

“We chose these two companies for a reason,” said Joyce. “We love the technologies and leadership of Arcam AB and SLM Solutions. They each bring two different, complementary additive technology modalities as individual anchors for a new GE additive equipment business to be plugged into GE’s resources and experience as leading practitioners of additive manufacturing. Over time, we plan to extend the line of additive manufacturing equipment and products.”

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.

3D printed components are typically lighter and more durable than traditionally-manufactured parts because they require less welding and machining. GE Aviation is using additive manufacturing to produce components in its most advanced military engines. It is also developing the Advanced Turboprop Engine (ATP) for a new Cessna aircraft with a significant portion of the entire engine produced using additive manufacturing.

In July, GE Aviation introduced into airline service its first additive jet engine component – complex fuel nozzle interiors – with the LEAP jet engine. The LEAP engine is the new, best-selling engine from CFM International, a 50/50 joint company of GE and Safran Aircraft Engines of France. More than 11,000 LEAP engines are on order with up to 20 fuel nozzles in every engine, thus setting the stage for sustainably high and long-term additive production at GE Aviation’s Auburn, Alabama, manufacturing plant. Production will ramp up to more than 40,000 fuel nozzles using additive by 2020.

“Additive provides a new palette for engineers to create,” said Joyce. “We see value potential to reduce product cost and improve NPI spend. Ultimately, as we develop more productive machines, we can build additive manufacturing ‘as a service’ for our customers.”

GE will host an investor call at 8:30AM ET to discuss these transactions.

 

 

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