GE's 3D Printing Acquisitions Not Seen Accelerating Consolidation in the Space - Stifel (DDD) (SSYS) (XONE)

September 6, 2016 12:13 PM EDT
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While moving the 3D sector higher today, Stifel analyst Patrick Newton does not see General Electric's (NYSE: GE) plans to acquire Arcam AB and SLM Solutions Group AG being indicative of consolidation accelerating for their coverage.

Newton commented, "Although shares of 3D Systems (NYSE: DDD), Stratasys (NASDAQ: SSYS), ExOne (NASDAQ: XONE), and non-covered 3D Printing peers are reacting positively on the news, likely on hopes of future consolidation, we see limited read-through to our coverage given GE management’s commentary that the company has a clear focus on metals and not the plastics market within additive manufacturing. Additionally, we see acquisitions of metal functionality by GE competitors as unlikely given EOS and Concept Laser are privately held and seem unwilling to sell based on our prior conversations, with Arcam representing a unique technology and SLM significantly larger than other available SLS peers (excluding EOS and concept Laser). Although the announcement has the potential to bring attention to the industry, and legitimize additive manufacturing for industrial applications, we believe the announcement is more indicative of the adoption and the potential of metal application in aerospace, an area where our coverage lacks material expertise/volume. Accordingly, we do not see GE’s move as indicative of consolidation accelerating in our 3D Printing coverage."

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