An all-cash bid for SLM at EUR 20 per share, represents an 84% premium on the 3-month average trading price of EUR 10.89. Nikon’s proposed acquisition of SLM Solutions values the company at EUR 622 million, $622M, according to the company.
When takeover talk of SLM Solutions was last in the news, GE Additive valued SLM at EUR 38 per share or EUR 900M, $745 million at the exchange rate of the time.
The bid figure is reminiscent of early 2016 when SLM Solutions was trading around EUR 20; speculation during the year would drive up the firm’s share price to more than double.
Toshikazu Umatate, CEO of Nikon, said, “By acquiring SLM Solutions, Nikon is taking an important step towards our Vision 2030. We are focused on digital manufacturing as a growth driver and will create value through the promising market of metal additive manufacturing for our stakeholders.”
According to SLM Solutions, Nikon now has “binding commitments from SLM’s key shareholders Elliott Advisors UK Limited (Cornwall), ENA Investment Capital and SLM’s founder Hans J. Ihde to support the transaction by way of irrevocable tender commitments comprising shares and all SLM convertibles bond securities to held.”
Completion of the deal is not guaranteed. Foreign investment control clearance and other customary conditions must be navigated. However, the board expects these conditions to be satisfied and the takeover offer to be made in late September or early October.
Part of the deal includes Nikon subscribing to a 10% capital increase of SLM Solutions. These funds are expected to be in the region of EUR 45.4 million.
Elliot Advisors playing the long game (badly)
In 2016, GE walked away from its planned purchase of SLM Solutions when activist investor Elliott Advisors built a 20% stake in the German metal 3D printing company. The GE bid valued SLM Solutions at EUR 38 per share, or a total price of $745 million. It is generally understood that GE sought to acquire SLM Solutions as the early 3D printed LEAP fuel nozzles were built on SLM systems by Morris Technologies.
In 2012 Morris Technologies was acquired by GE Additive, and founder Greg Morris moved with his company. Aerospace has lengthy development cycles and rigorous certification protocols, so it was not until 2015 that the Federal Aviation Administration certified a 3D-printed housing for a sensor that would fly on GE commercial jets. With FAA certification of the LEAP-1C jet engine and its 3D printed fuel nozzles in the pipeline, GE made a move for SLM Solutions. Certification of the 3D printed LEAP jet engine was successful, GE’s bid for SLM Solutions was not. The plan was thwarted by Elliot Advisors’ attempt to extract extra cash.
GE decided to purchase Concept Laser instead, as predicted by 3D Printing Industry at the time.
Elliot Advisors would go on to provide SLM Solutions with €13 million of capital during 2019.
SLM Leadership on Nikon Takeover
With CEO Sam O’Leary at the helm since January 2021, The fortunes of SLM Solutions have been buoyed by machine orders from Rolls Royce and BOSCH. Divergent Technologies, sister company to the 3D printed hypercar developer Czinger Motors, is also a high-profile customer with 16 SLM systems, plus further on order. Might one of these customers launch a counter-bid for SLM? That remains to be seen.
CEO O’Leary said, “Nikon has more than a century of history in developing cutting-edge opto-electronic technology and precision equipment. I am excited for SLM to partner with Nikon to further extend our technology leadership position. We believe this transaction and partnership is very beneficial for all our stakeholders – shareholders, employees and customers alike.”
Nikon’s Umatate believes, “3D Printing will revolutionize mass production by enabling our clients to manufacture highly complex parts, reduce cycle time, carbon emissions, energy costs, and waste. Nikon and SLM Solutions 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.”
SLM has stated that Nikon will not “initiate the conclusion of a domination agreement for at least three years.” The current senior management team of SLM Solutions will remain in place.
Nabeel Bhanji, of Elliott Advisors said: “Elliott is pleased to have played a key role in SLM’s journey over the past six years, helping the Company stay at the forefront of Additive Manufacturing innovation and product development. We are confident that Nikon, with its excellence in manufacturing and deep experience in technology, will further the innovation and distribution of SLM’s market-leading products.”
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Featured image shows the SLM Solutions’ SLM 800 3D printer. Photo via SLM Solutions.