Dreamlike 3D printing IPOs we’d love to see: GE Additive and EOS – 3DPrint.com

Because the response to my Dream M&A posts has been so positive, our editor-in-chief Michael Molitch-Hou asked me to check out some 3D printing IPOs that we’d love to see in 2021.

EOS GmbH

The EOS M 400 metal AM machine in Audi’s metal 3D printing center in Ingolstadt, Germany (Courtesy of Audi AG)

Let’s start with the obvious: EOS is a leader in powder bed fusion printers, both polymers and metals. The competitor SLM Solutions is public. Arcam and Concept Laser were bought by GE. Realizer was bought by DMG Mori. Other competing firms received substantial investments.

EOS alone is capable of developing parts and techniques suitable for use on thousands of polymer and metal machines. It also has the largest installed base and is the only truly truly global player in polymer sintering. EOS is also a leader in metals, although GE and SLM Solutions in particular exert some competitive pressure. New providers like VELO3D should also apply more pressure in the coming years.

But all in all, EOS has a huge lead over everyone else in terms of sales, profitability and installed base. It’s a very trustworthy company too. You are also working on future technologies such as “million-diode laser”. A listed global 3D printing company would be a big win for Germany and German industry. It would also help EOS to push back the competition from optimistic SPAC participants.

However, it is unlikely. EOS is 100% owned by the Langer family and EOS CEO Marie Langer informed us on the 3DPOD (embedded below) that a public offer was out of the question.

3DPOD Episode 22: Marie Langer the CEO of EOS

However, a dozen SPACs later, the family may have changed their minds. With A and B shares, the family could retain a high degree of control over a stock corporation for many generations, especially if this is partially linked to a family office or the like.

The Langers seem to be far more preoccupied with legacy than money right now. The company is conservative and looks very long-term. All in all, an EOS IPO would be very unlikely. If the family claims that this is a once-in-a-lifetime opportunity to become a DAX company, then maybe they can be convinced. However, it is more likely that they would rather stay out of the limelight and think of the future not in a quarter-by-quarter window, but across the years, decades, and generations.

GE additive

The 3D printed oil pan cover for the F110 engine. Image courtesy GE.

GE has entered the 3D printing industry very aggressively with the acquisition of Morris, Arcam and Concept Laser. In all honesty, people were scared of what the cutthroat gang at GE had planned for all of us. The logic seemed unstoppable as weight savings in GE’s empire from trains to planes to turbines accelerated the industrialization of GE’s machines, making them more productive and efficient.

The use of additives in power plants, engines and especially in the very profitable and incredibly difficult aero engine business would ensure that GE maintains a head start in all of these areas by using topology-optimized and faster parts -to-market, lower inventory and higher performance. It seemed like some kind of nice autocatalytic cycle.

And it could have been, would be and somehow, in another, much more stable dimension, it still is. There is a parallel universe where you can make long safe bets on Houses, the US Dollar and GE. A steroid-free baseball universe, apple means apple pie and not apple, in which the American flag unites everyone and the hardworking workers develop the most difficult and trustworthy things the world has as we watch in awe.

GE stock was around $ 30 per share in 2017 and has fallen below $ 8 a few times since, but is now on the upswing. An expected explosion in CAPEX spending is now propelling the stock higher and should benefit. In fact, the company has seen a big boom recently. But stocks are now at 2009 levels and lower than 1996.

So the past few years have been miserable for GE. As a companion article to “An Investment Bonanza is Coming” by the Economist, you can also read the 1996 article “What happened to the CAPEX boom”.

GE’s market cap was over $ 3,981 billion in 2001, $ 161 in 2008, $ 65 in 2018, and has now risen back to $ 122. For the past two years, the company has seen sales decline more than 16% per year. In selling both the rail and oil and gas units, GE sold two companies that could have benefited immensely from 3D printing and that could have acted as part of their in-house 3D printed flywheel. So maybe 3D printing is no longer strategic? The entity that GE Additive has had the strongest relationship with Fantastically Profitable, GE Aviation, isn’t doing that hot either.

So, for GE, there are some obvious choices the conglomerate can make.

  1. It can catch on and wait for the aviation demand to hopefully recover quickly. When demand returns, the overwhelming returns from aviation will fuel a shiny new GE to grow again as a more focused company. The resulting funding and market success will then enable GE Additive to make better machines that make better parts for the most critical applications, increasing sales and becoming the additive leader.
  2. It can catch on and wait for the aviation demand to hopefully recover quickly. When demand returns, the overwhelming returns from aviation will fuel a shiny new GE to grow again as a more focused company. The resulting funding and market success will then drive GE Additive to make better machines that make better parts just for GE itself. It won’t actually sell machines, but additives become an enabler for aviation.
  3. It can get rid of electricity, energy, and aviation and focus on becoming a pure medical company.
  4. It can become a medical-only company and use the cash on divestments to acquire Philips Medical and other assets specifically to become a leader in medical imaging specifically.
  5. Can it make some kind of creative shift with Siemens to have a combined energy business, a combined medical business, and keep aviation?
  6. Or it can slide into insignificance.

Whatever the option, it may be tempting to sell GE Additive or, in the exciting days of 3D printing, to sell stocks and not parts, spin GE Additive into a separate public company. This can give the company the money it needs to run some of the scenarios above.

What do you think? Which 3D printing IPOs would you like to see?

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