Just when you thought 3D Systems couldn't possibly make another move this year, the company breaks out its checkbook one more time.
The Rock Hill, S.C.-based 3D printer manufacturer and supplier has just purchased a portion of the Xerox Corporation's Wilsonville, Oregon product design, engineering and chemistry group, and related assets, for $32.5 million in cash.
It's a move designed to leverage both companies' 3D printing capabilities to accelerate growth and cement leadership positions.
"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," 3D System's CEO Avi Reichental said.
The agreement expands the decade-and-a-half-long collaboration between the two companies, which has already produced 3D Systems' best selling ProJet series 3D printers.
"This deal takes advantage of Xerox's world-class capabilities and expands our relationship with 3D Systems in the exciting and dynamic 3D printing industry," said Kevin Warren, president of Xerox Strategic Growth Initiatives. "It emphasizes how we are leveraging our expertise while we continue to evolve our business model and pursue strategic growth opportunities."
As part of this agreement, 3D Systems expects to add more than 100 experienced Xerox engineers and contractors specializing in product design and materials and immediately begin to operate its own facility within the Xerox Wilsonville campus.
Likewise, 3D Systems expects to progressively increase its annual research and development expenditures by approximately 75 percent to 100 percent over the next few years as it completes certain Xerox related engineering services commitments and fully leverages its expanded capabilities.
Xerox will maintain ink and print head development resources, along with research relevant for digital printing and the 3D markets.
"The stronger our marketplace leadership, the more powerful our economic model becomes," Reichental said. "Simply put, a solidified position translates directly to higher revenue, higher profitability and greater earnings power over time, and we are willing to sacrifice short term earnings to get there faster."
It just purchased the 3D printing filament manufacturer Norton, Ohio-based Village Plastics, which primarily produces ABS, PLA and HIPS 3D printing filament.
2013 was a watershed year for 3D Systems, which also bought up the Figulo Corporation, the Sugar Lab, TeamPlatform, CRDM, the French Phenix Systems, GeoMagic, and the Rapid Product Development Group.
On top of all that, 3D Systems has also teamed up with Motorola to print its groundbreaking modular phone; worked with the world famous Smithsonian to 3D scan the museum's collection and display it on the Internet; and will provide 3D printers to the FIRST Robotics Competition.