GE Raises Stake in Additive Manufacturing Firm
General Electric is increasing its stake in Sweden’s Arcam AB to 95% in another move to build its advanced manufacturing business.
Arcam makes electron beam melting machines for additive manufacturing, the process by which metal components are made layer by layer using 3D printing. The machines use a high power electron beam to melt the metal powders that form the layers.
GE initially acquired 77% of Arcam in September 2016 as part of a $1.4 billion deal that also included a stake in German 3D printer company SLM Solutions Group. It will raise its stake in Arcam by buying shares from hedge funds Elliott Management and Polygon Investment Group for 345 Swedish crowns ($41.44) each.
In trading Wednesday, Arcam shares jumped 11% to 346.50 Swedish crowns.
GE also plans to acquire the remaining 5% of Arcam in a compulsory buyout and to delist the company from the Nasdaq Stockholm exchange where it currently trades.
The increased commitment to additive manufacturing comes as GE continues a major restructuring of its vast portfolio. CEO John Flannery has said it will focus on three core segments — aviation, power and health care — and sell more than $20 billion in assets.
The company has been expanding its GE Additive Division, acquiring GeonX, a German maker of engineering simulation software, in November and has said it wants Additive to be a $1 billion line of business by 2020.
Arcam generated about $78 million in revenue in 2016, up from about $68 million in 2015. It also produces advanced metal powders for use in additive manufacturing.
“GE sees a growth opportunity in the ‘additive’ industry, where everything from jet engine parts to medical instruments are being produced with 3D printing,” Investor’s Business Daily said.
David Joyce, the head of GE Additive, has called its initial investment in Arcam “a key step in our overall additive strategy.” The SLM deal fell through, but GE acquired a 75% stake in another 3D company, Concept Laser, in December 2016 for $599 million.