General Electric [GE] on Tuesday said it plans to acquire two European companies that provide additive manufacturing capabilities for various industries, including aerospace, with the deals worth a combined $1.4 billion.
The two companies, Sweden’s Arcam AB and Germany’s SLM Solutions Group, will report to David Joyce, president and CEO of GE Aviation. GE said that Joyce will lead the growth of the two new companies and spearhead the integration effort to drive 3D manufacturing applications across the company.
Arcam has customers in the aerospace and healthcare industries and its electron beam melting machine performs 3D printing and produces advanced metal powders. SLM produces laser machines for metal-based additive manufacturing with customers in the aerospace, energy, healthcare and automotive industries.
“We love the technologies and leadership of Arcam AB and SLM solutions,” Joyce said in a statement. “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.”
Arcam, which has 285 employees and had $68 million in sales last year, says on its website that its electron beam melting technology has applications in all segments of aerospace including commercial and military aircraft, space, missiles, and various subsystems such as engines and accessories. The company also says its technology enables better optimization of raw materials, shorter lead times, and new design possibilities.
SLM has 260 employees and had $74 million in sales in 2015. The company is part of a private team of scientists and engineers that is working on Google’s [GOOG] lunar xprize competition to perform the first private mission to the moon. SLM’s equipment has been used to manufacture the wheels and camera observer for the team’s lunar rover.
Jeff Immelt, GE’s chairman and CEO, said in a statement that “GE’s aspirations in additive fits our long-term business model. We have world-class industrial businesses that leverage systems integration, material sciences, services and Predix. We want all of our businesses to leverage the GE Store, promote digital differentiation, and drive productivity for GE and our customers.”
Since 2015 GE has invested $1.5 billion in additive manufacturing technologies and has developed related applications across six of its businesses. GE said that the closing of its public tenders for Arcam and SLM are subject to minimum acceptance thresholds and regulatory approvals. Arcam’s and SLM’s headquarters and other key locations will remain in place.
Arcam and SLM said their board recommend that their shareholders approve GE’s offer. Arcam’s financial adviser on the deal is Carnegie Investment Bank AB.