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GE to Acquire Both Arcam AB and SLM Solutions for an Aggregate $1.4B BY ANDREW VAHRADIAN, SEPTEMBER 19, 2016

GE entered into agreements to acquire Arcam AB and SLM Solutions Group, two suppliers of additive manufacturing equipment, for approximately $1.4 billion in aggregate.

Both transactions will be structured as a public tender offer for all of the outstanding shares of stock of each company. Under the terms of the two deals, GE will acquire Arcam for an enterprise value of $648.1 million, or 8.8x LTM revenues of $73.4 million, and SLM for an enterprise value of $740.3 million, or 7.6x LTM revenues of $96.7 million.

Additive manufacturing, also known as 3-D printing involves taking digital designs from computer aided design (CAD) software, and laying horizontal cross-sections to manufacture the part. As additive components require less welding and machining, they are normally lighter and more durable than traditionally-manufactured components, and generate sufficiently less scrap material.

Arcam provides additive manufacturing solutions for the production of metal components for the aerospace sector, metal implant systems for the orthopedics market, and produces advanced metal powders for the software industry. The company invented the electron beam melting machine for metal-based additive manufacturing. The company is based in Mölndal, Sweden, and employs 285 people.

SLM Solutions produces laser machines for metal-based additive manufacturing solutions for customers in the aerospace, energy, healthcare and automotive industries. The company operates in two segments, Machine Sales and After Sales. The Machine Sales segment develops machines for selective laser melting (SLM) additive manufacturing. The After Sales segment provides machine-related services and offers replacement parts, accessories, and merchandise. SLM is based in Lübeck, Germany and employs 260 people.

Both Arcam and SLM will spearhead GE's evolution into a digital industrial company and provides the company with complementary additive technology modalities to serve as the foundation for GE's new additive equipment business. Arcam and SLM each provide GE with technologies that will extend the company's line of additive manufacturing equipment and products and give GE an opportunity to reduce product cost and improve new product innovation (NPI) spend. It will also transition GE's growing additive manufacturing platforms into more of a service business for its customers. Management anticipates to grow the new additive platform to $1 billion by 2020.

GE will retain both Arcam's and SLM's management teams and employees and will maintain the headquarter locations and key operating locations of each company. These facilities will collaborate with the broader GE additive network including the manufacturing and materials research center in Niskayuna, Japan, and New York, NY, and the additive design and production lab in Pittsburgh, PA. Arcam and SLM will be incorporated under GE's Aviation division and the executive teams will report to David Joyce, the President & CEO of GE Aviation.

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