It's completely understandable that shares of 3-D printer makers rallied on Tuesday following news General Electric (GE) is buying two of their peers. The purchases are a big vote of confidence for 3-D printing by one of the world's largest companies, and raise the potential for other firms to counter GE by making their own 3-D printing acquisitions.
Still, printer makers might be a little nervous that such a big name is entering the space. Particularly since GE's move is the latest in a string of noteworthy entries over the last few years.
GE is buying Arcam AB and SLM Solutions, two European makers of additive manufacturing systems used to create metal objects for industries such as aerospace, healthcare, energy and automotive, for a combined $1.4 billion. The companies produced $142 million in revenue last year between them.
GE forecasts Arcam and SLM will underpin an additive manufacturing business that will produce $1 billion in annual sales by 2020, and also drive $3 billion to $5 billion in cost savings over the next decade by allowing it to avoid buying printers from third parties.
Nonetheless, the news fueled M&A hopes for 3-D printer makers 3D Systems (DDD) , Stratasys (SSYS) , ExOne (XONE) and Voxeljet (VJET) , and resulted in them posting gains ranging from 3.8% to 5.8% on Monday. Belgian 3-D printing software/services provider Materialise (MTLS) rose 7.9%.