Nikon shakes up metal 3D printing with offer to buy SLM solutions – 3DPrint.com

Japanese lithography, scanning and camera company Nikon (TYO:7731) is set to acquire metal 3D printer manufacturer SLM Solutions (ETR:AM3D). The Japanese firm offered an 83.7% premium on a three-month average of SLM shares, offering a cash consideration of €20 as well as an offer to buy back SLM bonds. Nikon estimates the value of the transaction to be 622 million euros. Nikon will also subscribe for new SLM shares equivalent to a 10% capital increase for the company. The company says activist investor Elliott Investment Management, ENA Investment Capital and Hans-Joachim Ihde are in favor of the offer.

Porsche’s E-drive box printed on the NXG XII 600 in just 21 hours. Image courtesy of SLM Solutions/Porsche.

¨The Management Board and the Supervisory Board of SLM welcome and fully support Nikon’s takeover offer and investment. The transaction provides an attractive opportunity for SLM shareholders and employees and will allow SLM to continue to thrive in the rapidly developing Metal AM space to even better serve its customers. Subject to review of the offer document, the management board and the supervisory board intend to recommend that SLM shareholders accept the tender offer and have also undertaken to accept the tender offer. call for all shares they hold,” SLM Solutions said in a statement.

The opening event for the new Wabtec facility. Image courtesy of Trains.com.

A good deal for SLM solutions

Financially, it’s a good deal for SLM’s shareholders. The laser powder bed fusion (L-PBF) company’s market cap is currently around $443 million. SLM was valued significantly higher than a few years ago when GE offered to buy the company. However, Eliot shied away from the deal and GE went after Concept Laser instead. Given the current economic climate, this deal could be the best for all parties.

It also looks like Nikon is the right partner for SLM. His experience in 3D scanning can give SLM an edge in quality assurance and in-process monitoring. The RBI is further enhanced by Nikon’s extensive experience in the field of lithography.

Nikon also has the financial wherewithal to win in the laser wars. Currently, SLM is vying for 3D printing supremacy by offering the NXGVII 12-laser printer. It looks like it’s ahead of the pack, but Velo3D, 3D Systems, EOS, and GE will also have to release machines with multiple lasers. Managing many energy sources requires much more complex machinery, much more complicated controls, and much more software and monitoring. This is a radical change in complexity from the systems of only a few years ago. Optimal tool pathing, in addition to waste heat and error handling, is now incredibly complex. Nikon’s previous experience in lithography will help the company meet these challenges. At the same time, Nikon’s deep expertise in optomechanical manufacturing will help it understand the requirements of 3D printing parts and develop new 3D printers. This same expertise will also help them improve the optics.

“Nikon has over a century of experience in developing advanced optoelectronic technologies and precision equipment. I am delighted that SLM is partnering with Nikon to further expand our position as technology leader. We believe this transaction and partnership is of great benefit to all of our stakeholders – shareholders, employees and customers,” said SLM CEO Sam O’Leary.

A good deal for Nikon

I think this is a fantastic deal for Nikon and the company is buying itself a real future in additive manufacturing (AM). The only risk is that SLM Solutions has promised too much or has embarked on too complex a technological pile and that its 3D printers do not work as advertised.

In acquiring Morf3D a few months ago, Nikon basically did excellent due diligence. Morf3D is a high-end manufacturer of aerospace components and has purchased SLM Solutions machines, including the new 12 laser 3D printer. This experience will have given him a good insight into how SLM’s equipment performs in production.

In the future, by owning both Morph and SLM, Nikon could create true manufacturing solutions by understanding what is needed to produce, and then building the machines that do just that.

“By acquiring SLM, Nikon is taking an important step towards our Vision 2030. We are focusing on digital manufacturing as an engine of growth and will create value through the promising metal additive manufacturing market. Metal additive manufacturing will revolutionize mass production by enabling our customers to manufacture highly complex parts, reducing cycle time, carbon emissions, energy costs and waste. Nikon and SLM share the vision that our technology-driven innovation will transform the future of manufacturing. This acquisition will be key to growing our digital manufacturing business,” said Nikon CEO Toshikazu Umatate.

Shaking up the metal 3D printing market

It is also a great decision for Japan. The country has been rather distant in the 3D printing game. Sony got into SLA machines but pulled out before the market really took off. Since then, Japan’s efforts have been limited to hybrid machines from Sodick and Matsuura as well as efforts from DMG Mori. Comparatively, Japan has industrialized few 3D printing processes, parts, and has few companies, OEMs, and startups in the industry. Thanks to Nikon, Japan could now truly take the wheel of the AM. All in all a fantastic decision for Japan, Nikon and SLM Solutions.

For the market as a whole, this will make it harder for GE to lead in 3D printing. The company will need to allocate new capital to GE Additive in order to score on a multi-laser playing field. Additionally, the logical approach is for Nikon to develop truly automated 3D printing production cells that will be more integrated, have higher throughput and higher quality. In the meantime, the L-PBF market leader, EOS, will now have to seek investors or partners to be able to take on Nikon. Perhaps EOS will now be asked to partner with former investor Zeiss to add automation, quality control and monitoring. Perhaps Zeiss could buy EOS, if only to make sure it stays ahead of Nikon in lithography. He would hate to be beaten in lithography in the future due to a booming Nikon and new manufacturing techniques.

Additive Industries now seems more likely to be taken over, perhaps by Canon? For Velo3D, VulcanForms and Seurat, the challenge is the same, but the numbers have only increased. We anticipate a number of in-depth acquisitions or partnerships as a result of this.