3D Systems to acquire Xerox R&D group for $32.5 mil’

Xerox is the sole supplier of solid ink printing solutions

3D Systems Corp. (3DS) said Tuesday it will acquire a Xerox R&D group focused on solid ink engineering and product design for $32.5 million in cash.

Rock Hill, S.C.-based 3DS manufactures commercial and consumer 3D printers, printing materials and software services as well as CAD modeling, reverse engineering and inspection software tools.

3DS said Xerox is the sole supplier of solid ink printing solutions, and that the planned acquisition expands a partnership with Norwalk, Conn.-based Xerox that already developed 3DS’ high-end ProJet printers.

Two weeks ago, 3DS launched the ProJet 4500, which it called the only “continuous-tone, full-color plastic 3D printer available on the market.” The company believes the solid ink technology delivers better color print quality and produces far less waste than traditional color laser printing.

The R&D group is based at a Xerox campus in Wilsonville, Ore., and has over 100 engineers and contractors. 3DS said once the deal closes by the end of the year, it will operate its own facility at the campus.

The deal calls for Xerox to maintain ink and print head development resources along with research relevant for digital printing and the 3D markets. It also calls for 3DS to ramp up R&D expenditures by 75 – 100 percent “over the next few years.”

“This bold step is consistent with our belief that we must act quickly and decisively to extend and cement our marketplace leadership position by taking full advantage of the window of unprecedented opportunity in front of us,” said Avi Reichental, 3DS CEO.

Earlier this month, 3DS acquired 3D printing filament manufacturer, Village Plastics Co., based in Norton, Ohio. Terms of the deal were not disclosed. 3DS said the purchase accelerates its development of precision thermoplastics for 3D printing.

Flush with proceeds from a recent stock offering, 3DS is continuing an aggressive M&A spree it started over two years ago. Tuesday’s acquisition proves the company will continue to expand its footprint in Europe. In June, 3DS made a deal to acquire French 3D printer maker Phenix Systems.

Check out the long list of 3D Systems’ acquisitions in just over two years:
 

• May 2011 – 3D Systems begins trading on the New York Stock Exchange, an indication the company is ready to be more aggressive in the marketplace. However, at this point, the company has already acquired in the last couple of months both Freedom of Creation and The3dStudio.com, which give them collections of printable 3D objects, many of them consumer-oriented, along with Print3D, a start-up aimed at the industrial CAD market.
• July 2011 – Alibre, Inc. (purchase price not disclosed), a maker of parametric CAD software. With a full suite of solutions that target both the hobbyist and the professional, this is 3D CAD software designed to be both powerful and easy to use, expanding the number of people likely to create 3D objects for eventual printing. 
• September 2011 – Formero (purchase price not disclosed), a provider of on-demand custom parts services. Basically acquired to create a beachhead in Asia-Pacific – renamed 3D Systems Asia-Pacific.
• October 2011 – Kemo Modelmakerij (purchase price not disclosed), a provider of on-demand custom parts services. If 3D Systems believes that the use of 3D printing (and scanning) for one-off custom replacement parts and prototypes has a business future, it makes sense to have an arm that provides this service, thus the buys of Formero and Kemo and conversion to non-U.S. headquarters.
• November 2011 – Huntsman’s stereolithography line ($41 million), print materials and actual 3D printers. Basically, buying up a competitor and adding to 3D Systems’ line. The buy plays to the industrial and medical markets.
• January 2012 – Z Corporation and Vidar Systems ($135.5 million), including the purchase handheld scanner technology and manufacturing, along with simply consolidating the industry and purchasing a competitor. An early indication the company was looking to really invest in the capture-to-print workflow.
• April 2012 – My Robot Nation (purchase price not disclosed), a company with software that allows people to design their own robots and other figurines for 3D printing. Basically, if you’re going to have a Cubify, a consumer-oriented 3D printer, you better have some content for people to print. Not everyone can just design their own robot in 3D software (actually, very, very few people can do that…).
• April 2012 – Paramount Industries (purchase price not disclosed), a company providing direct manufacturing and product development solutions for the aerospace and medical industries. They added industrial 3D printers to capabilities that already included tooling and assembly. 3D Systems got a window into big industries it feels should be using 3D printing for product development.
• May 2012 – Bespoke Innovations (purchase price not disclosed), a company that targets the medical industry, with technology that allows for the design and print of prosthetics and orthortics. The medical industry has shown itself to be a ripe market for short-range scanning, 3D imaging in general, and 3D printing, and 3D Systems is here making an obvious play to secure a position there.
• May 2012 – FreshFiber (purchase price not disclosed), a small firm that allows people to buy customized iPhone cases and the like, created with 3D printers. Again, stuff you can print yourself instead of buy from other people, and the kind of customization 3D printing makes much easier. Does this deal make other companies think twice about buying 3D Systems printers to create a similar business, since they’d be competing against their supplier?
• August 2012 – Viztu Technologies and its flagship product, Hypr3D (purchase price not disclosed), an online resource for users to upload photos and create printable 3D models, not unlike the 123D Catch solution provided by Autodesk, but completely browser-based. If the goal is to make it easier for users to create things they are able to print, this should help them get there.
• October 2012 – The Innovative Modelmakers (purchase price not disclosed), a provider of on-demand custom parts services, much like Kemo, bought a year prior. Adds to 3D Systems Benelux’s capabilities and builds out abilities to provide rapid prototyping and part replacement.
• October 2012 – Rapidform ($35 million). Working on this right now, but basically brings software specifically targeting the data capture marketplace. Will they merge this with Alibre? Is Rapidform a competitor to Alibre? These are things to watch going forward. EDIT: Here’s the story on Rapidform, plus an interview with Rapidform.
• January 2013 – Geomagic (price still unknown). A competitor of Rapidform’s and also vital to the scan-to-print workflow, according to 3D Systems.In late February, 3D Systems acquired Geomagic, Inc., the leading global provider of 3D authoring software including design, sculpt and scan tools used to create 3D content and inspect products throughout the entire design and manufacturing process.
• May 2013 – Rapid Product Development Group, Inc. (RPDG), a provider of rapid prototyping, injection molding, die casting and fast manufacturing of production parts for the automotive, computer, consumer appliances, medical device and industrial equipment industry.
• July 2013 – 80 percent ownership stake in France-based Phenix Systems, a global provider of Direct Metal Selective Laser Sintering (DMSLS) 3D printers for a maximum price of $17.32 (€13) per share.
• August 2013 – VisPower Technology, Inc.’s TeamPlatform cloud-based software and data management platform (no purchase price disclosed) for project design, manufacturing, and engineering teams to share files and collaborate on CAD/3D printing projects. The M&A move signals 3D Systems’ intent to target CAD software giant Autodesk’s market share in the AEC industry with its comprehensive Autodesk 360 cloud-based CAD software suite.
• September 2013 – Sugar Labs, a California-based 3D printer of custom edible products made from sugar. No terms disclosed.
• December 2013 – Figulo Corporation, the industry’s leading consumer-oriented 3D ceramics printer. Terms of the deal were not disclosed.