The month of October turned out to be a turbulent one for GE Aviation. After announcing a $1.4 billion acquisition of both Arcam and SLM Solutions (client registration required), it emerged that activist investor Elliot Advisors (which owns stakes in both companies) was challenging the terms of the deals. Elliot Advisors claimed that the acquisition bid for SLM Solutions undervalued the company, despite being at a 37% premium over SLM’s stock price at the time. GE Aviation eventually dropped its bid for SLM Solutions, and was forced to both raise the price of the Arcam deal and reduce the acceptance threshold. GE then announced that it was acquiring Concept Laser, a German manufacturer of selective laser sintering (SLS) 3D printers.
Now that the dust has settled, GE has still walked away with two major 3D printer manufacturers. There are notable differences between SLM Solutions and Concept Laser – for example, SLM Solutions is more focused on higher throughput 3D printing. Its systems are capable of utilizing up to four lasers simultaneously, greatly speeding up the printing process. Concept Laser claims to offer superior control over part microstructure, and claims that this enables production of larger parts with reduced internal stresses. Ultimately, GE got what it wanted: not its initial acquisition target, but the expansion of its footprint in Europe, access to SLS technology, and the addition of a successful midsize business selling printers. GE may have favored SLM Solutions over Concept Laser, but it was also in acquisition talks with Concept Laser long before SLM rejected its deal.
The real winners in these deals are SLM Solutions and Elliot Advisors. SLM Solution’s stock price has fallen substantially from its peak of $48 per share but is still above its pre-deal price of $31 per share. Elliot Advisors has correctly identified that there are a large number of players seeking to enter the 3D printing market. Aerospace competitors such as Rolls-Royce are chief among them, but it is entirely likely that diversified industrials, major printer players such as HP, and even design software companies like Dassault Systemes and Autodesk may seek acquisitions to enter the market. SLM Solutions can continue to shop around for buyers – but now with the added prestige of being GE’s first choice. Readers should be aware that it is currently a sellers’ market in the 3D printing space – those interested in acquisitions should be prepared to move quickly and offer lucrative premiums for these players.
By: Anthony Schiavo