Is 3D Systems Plotting a Buyout?

Wyatt Investment Research

Shares of the largest 3-D printing company were halted earlier today after the company announced plans to sell $250 million of new stock tomorrow. The mysterious trading pause has fueled speculation that 3D Systems (DDD) may be preparing to buy out some of its competitors.

Some, including William Blair analyst Brian Drab, think that Swedish company Arcam (AMAVF) could be 3D’s primary buyout target. Arcam uses electric bean melting technology to create metal parts – something that could enhance 3D Systems’ technological capabilities.

It seems investors are buying into the Arcam speculation. Shares of the micro-cap stock shot up 10% in morning trading.

With a market cap of just $163 million, Arcam seems like the ideal buyout prospect for 3D Systems. Drab estimates that an Arcam takeover would cost 3-D between $180 million and $200 million. 3-D’s impending $250 million stock sale would thus cover the tab.

3D Systems has been on quite a tear of late. Shares have risen 35% in the past month, pushing the stock close to its all-time high of $46.44 established in late January. As a result, the company’s market cap has risen to $3.85 billion.

However, today’s stock-sale news has slowed the company’s momentum. Since putting its stock back on the market at 11:28 a.m. ET, shares have fallen 3.5%.



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