Procurement News Notice |
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| PNN | 7790 |
| Work Detail | GE plans to acquire two suppliers of additive manufacturing equipment, Arcam AB and SLM Solutions Group AG for $1.4 billion. Both companies will report to 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. “Additive manufacturing fits GE’s business model to lead in technologies that leverage systems integration, material science, services, and digital productivity,” said Joyce. “It will benefit from the GE Store and our core engineering capability.” In July, GE Aviation introduced into airline service its first additive jet engine component – complex fuel nozzle interiors – with the LEAP jet 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. GE Aviation is also using additive manufacturing to produce components in its most advanced military engines. In general aviation, GE is developing the Advanced Turboprop Engine (ATP) for a new Cessna aircraft with a significant portion of the entire engine produced using additive manufacturing. GE is branding itself as the world’s Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive, and predictive. GE is organized around a global exchange of knowledge, the GE Store, through which each business shares and accesses the same technology, markets, structure, and intellect. GE expects to grow the new additive business to $1 billion by 2020 at attractive returns and also expects $3 billion to $5 billion of product cost-out across the company over the next 10 years. Arcam and SLM will bolster GE’s existing material science and additive manufacturing capabilities. 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. Arcam AB, based in Mölndal, Sweden, invented the electron beam melting machine for metal-based additive manufacturing, and also produces advanced metal powders. Its customers are 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. SLM Solutions Group, based in Lübeck, Germany, produces laser machines for metal-based additive manufacturing with customers 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. “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. Ultimately, as we develop more productive machines, we can build additive manufacturing ‘as a service’ for our customers.” 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. Each acquisition is structured as a public tender offer for all of the outstanding shares of stock of each company. The closing of each public tender offer is subject to various conditions, including minimum acceptance thresholds and regulatory approvals. GE is in the process of making the necessary filings with authorities with respect to such tender offers, and, upon approval, the documents will be made publicly available. The Board of Directors of Arcam unanimously recommends that the shareholders of Arcam accept the offer made by GE. The offer represents a premium of 53.23% to the closing price of SEK 186.00 per share on Nasdaq Stockholm on Sept. 5, 2016, the last trading day prior to the announcement of the offer. In terms of the company’s long-term prospects, the Arcam board believes that the demand for the company’s technology for additive manufacturing of aerospace and orthopedic implant products and components will increase dramatically, meaning that the market has favorable long-term growth opportunities. As the market develops, more advanced technology is required, which benefits Arcam. SLM Solutions’ executive and supervisory boards also approve the merger with GE Aviation, which is offering shareholders 38.00 euros in cash per share, a 36.7% premium to the previous day's XETRA closing price. SLM Solutions has its initial public offering in 2014. Hans-Joachim Ihde, founder and chairman of the of SLM Solutions Group’s supervisory board, said, “General Electric has already accompanied us as a user and customer since our inception. They assumed a pioneering role in aerospace technology and were early to identify the benefits of selective laser melting – for example in terms of savings in the weight of components. They are entirely familiar with SLM Solutions’ multi-laser technology and its advantages vis-a-vis our competitors.” CEO Dr. Markus Rechlin said, “We expect the takeover to accelerate SLM Solutions’ evolution into a comprehensive systems supplier. For this reason, the takeover offers great opportunities for our employees and customers.” Both Arcam’s and SLM Solutions’ management issued statements that welcomed the promise of improved global product and service distribution the merger would allow. “Additive manufacturing is a key part of GE’s evolution into a digital industrial company. We are creating a more productive world with our innovative world-class machines, materials, and software. We are poised to not only benefit from this movement as a customer, but spearhead it as a leading supplier,” said Jeff Immelt, chairman and CEO of GE. “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.” |
| Country | United States , Northern America |
| Industry | Defence |
| Entry Date | 15 Oct 2016 |
| Source | http://www.aerospacemanufacturinganddesign.com/article/ge-acquires-arcam-slm-solutions-090716/ |
