• Expands design envelope to substantially reduce product cost;
• Enables productive new model for services cost and delivery;
• Lead in design and manufacture of highly valued parts;
• Enter a fast-growing industry where GE can build a competitive position;
• Leverages GE Store: key strengths in materials, software, and product design.
Both companies will report into David Joyce, President & CEO of GE Aviation. Joyce will lead the growth of these businesses in the additive manufacturing equipment and services industry. In addition, he will lead the integration effort and the GE Store initiative to drive additive manufacturing applications across GE.
“Additive manufacturing is a key part of GE’s evolution into a digital industrial company. We are creating a more productive world with our innovative world-class machines, materials and software. We are poised to not only benefit from this movement as a customer, but spearhead it as a leading supplier,” said Jeff Immelt, Chairman and CEO of GE. “Additive manufacturing will drive new levels of productivity for GE, our customers, including a wide array of additive manufacturing customers, and for the industrial world.”
GE expects to grow the new additive business to $1 billion by 2020 at attractive returns and also expects $3-5 billion of product cost-out across the company over the next ten years.
Arcam AB (arcam.com), based in Mölndal, Sweden, invented the electron beam melting machine for metal-based additive manufacturing, and also produces advanced metal powders. Its customers are in the aerospace and healthcare industries. Arcam generated $68 million in revenues in 2015 with approximately 285 employees. In addition to its Sweden site, Arcam operates AP&C, a metal powders operation in Canada, and DiSanto Technology, a medical additive manufacturing firm in Connecticut, as well as sales and application sites worldwide.
SLM Solutions Group (slm-solutions.com), based in Lübeck, Germany, produces laser machines for metal-based additive manufacturing with customers in the aerospace, energy, healthcare, and automotive industries. SLM generated $74 million in revenues in 2015 with 260 employees. In addition to its operations in Germany, SLM has sales and application sites worldwide.
“Additive manufacturing fits GE’s business model to lead in technologies that leverage systems integration, material science, services and digital productivity,” said Joyce. “It will benefit from the GE Store and our core engineering capability.”
Arcam and SLM will bolster GE’s existing material science and additive manufacturing capabilities. GE has invested approximately $1.5 billion in manufacturing and additive technologies since 2010. The investment has enabled the company to develop additive applications across six GE businesses, create new services applications across the company, and earn 346 patents in powder metals alone. In addition, the additive manufacturing equipment will leverage Predix and be a part of our Brilliant Factory initiative.
“We chose these two companies for a reason,” said Joyce. “We love the technologies and leadership of Arcam AB and SLM Solutions. They each bring two different, complementary additive technology modalities as individual anchors for a new GE additive equipment business to be plugged into GE’s resources and experience as leading practitioners of additive manufacturing. Over time, we plan to extend the line of additive manufacturing equipment and products.”
The additive effort will utilize GE’s global ecosystem, but be centered in Europe. GE will maintain the headquarters locations and key operating locations of Arcam and SLM, as well as retain their management teams and employees. These locations will collaborate with the broader GE additive ecosystem including the manufacturing and materials research center in Niskayuna, New York, and the additive design and production lab in Pittsburgh, Pennsylvania. They will also complement the technologies brought on by other key acquisitions such as Morris Technologies and Rapid Quality Manufacturing.
Each acquisition is structured as a public tender offer for all of the outstanding shares of stock of each company. The closing of each public tender offer is subject to various conditions, including minimum acceptance thresholds and regulatory approvals. GE is in the process of making the necessary filings with authorities with respect to such tender offers, and, upon approval, the documents will be made publicly available.
Additive manufacturing (also called 3D printing) involves taking digital designs from computer aided design (CAD) software, and laying horizontal cross-sections to manufacture the part. Additive components are typically lighter and more durable than traditionally-manufactured parts because they require less welding and machining. Because additive parts are essentially “grown” from the ground up, they generate far less scrap material. Freed of traditional manufacturing restrictions, additive manufacturing dramatically expands the design possibilities for engineers. “Additive provides a new palette for engineers to create. Parts are also being designed in GE Power, Oil & Gas, Healthcare and across GE’s services businesses,” said Joyce. “We see value potential to reduce product cost and improve NPI spend. Ultimately, as we develop more productive machines, we can build additive manufacturing ‘as a service’ for our customers.”
In July, GE Aviation introduced into airline service its first additive jet engine component complex fuel nozzle interiors with the LEAP jet engine. The LEAP engine is the new, best-selling engine from CFM International, a 50/50 joint company of GE and Safran Aircraft Engines of France. More than 11,000 LEAP engines are on order with up to 20 fuel nozzles in every engine, thus setting the stage for sustainably high and long-term additive production at GE Aviation’s Auburn, Alabama, manufacturing plant. Production will ramp up to more than 40,000 fuel nozzles using additive by 2020. GE Aviation is also using additive manufacturing to produce components in its most advanced military engines. In the general aviation world, GE is developing the Advanced Turboprop Engine (ATP) for a new Cessna aircraft with a significant portion of the entire engine produced using additive manufacturing.
“GE’s aspirations in additive fits our long-term business model. We have world-class industrial businesses that leverage systems integration, material sciences, services and Predix,” said Immelt. “We want all of our businesses to leverage the GE Store, promote digital differentiation, and drive productivity for GE and our customers. We are excited about the opportunity.”
GE will host an investor call at 8:30AM ET to discuss these transactions.
GE (ge.com) is the world’s Digital Industrial Company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. GE is organized around a global exchange of knowledge, the "GE Store," through which each business shares and accesses the same technology, markets, structure and intellect. Each invention further fuels innovation and application across our industrial sectors. With people, services, technology and scale, GE delivers better outcomes for customers by speaking the language of industry.
GE Aviation (geaviation.com), an operating unit of GE, is a world-leading provider of jet engines, components and integrated systems for commercial and military aircraft. GE Aviation has a global service network to support these offerings.
This communication is not an offer to purchase or a solicitation of an offer to sell shares of Arcam or SLM Solutions, as applicable. The solicitation and the offers to purchase shares of Arcam and SLM Solutions will be made pursuant to offer documents.
Shareholders of Arcam and SLM Solutions are advised to read the relevant offer documents, as may be amended or supplemented from time to time, when they become available, before making any decision with respect to the offers to purchase because such documents will contain important information about the proposed offer to purchase transactions and the parties thereto.
Investors and shareholders may obtain, when available, free copies of the offer documents, as may be amended or supplemented from time to time, at the website of GE Aviation at geaviation.com/additive.
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Forward-looking statements by their nature address matters that are, to different degrees, uncertain, and involve known and unknown risks and uncertainties, many of which are beyond GE Group’s control and all of which are based on GE Group management's current beliefs and expectations about future events. These forward-looking statements include all matters that are not historical facts. Forward-looking statements may and often do differ materially from actual results. No assurance can be given that such future results will be achieved. These or other uncertainties may cause GE Group’s actual future results to be materially different than those expressed in GE Group’s forward-looking statements. GE Group does not undertake to update its forward-looking statements.
These risks, uncertainties and assumptions include, but are not limited to, satisfaction of the minimum acceptance condition for each offer, the ability of GE to obtain the requisite regulatory approvals required to complete the offers to purchase, the satisfaction of the other conditions to the consummation of the proposed transactions, the timing of completion of the proposed offers to purchase, and the impact of the announcement or consummation of the proposed transactions on the relationships of GE Group and Arcam or SLM Solutions, including with employees, suppliers and customers. In addition, there can be no assurance that the offers to purchase will result in the consummation of an acquisition of Arcam or SLM Solutions. These and other important factors, including those discussed under “Risk Factors” included in GE Group’s Consolidated Annual Report on Form 10-K for the year ended December 31, 2015, may cause GE Group's actual events or results to differ materially from any future results, performances or achievements expressed or implied by the forward-looking statements contained in this communication. Such forward-looking statements contained in this communication speak only as of the date of this communication. GE Group expressly disclaims any obligation or undertaking to update these forward-looking statements contained in this communication to reflect any change in GE Group’s expectations or any change in events, conditions, or circumstances on which such statements are based unless required to do so by applicable law.
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Investor Contact: Matt Cribbins; P: +1 617-443-3003