3D Systems Corporation (NYSE:DDD)’s market value is heading downhill quickly. According to rumors which have been flying around for almost a month now, Goldman Sachs has been picked to manage a bid by General Electric Company (NYSE:GE) to purchase the industrial 3D printing company for an average of $32 per share.
According to 3DPrint, with a market cap of just $2.3 billion, any acquisition of 3D by GE could be done all in cash, due to GE’s overly large balance sheet, not to mention a market cap of $275 billion. Further, GE estimates that there are presently 300 functional 3D printers in the firm. A buyout of 3D Systems would cut the middle man and provide an expanding business as a producer of 3D printers.
GE has a tight relationship with 3D Systems, utilizing their machines for prototyping and manufacturing end-use components. Avi Reichental, CEO of 3D Systems, stated in late 2013 that they “have an excellent relationship with GE at the highest levels, and we’ve been collaborating with them for several years now on a variety of additive manufacturing applications.”
Despite the fact that nothing has been confirmed by GE, 3D, or Goldman, the rumor is not necessarily a spurious one. 3D needs help, it has a market for 3D printing yet its growth is stagnant and retrograde. GE, who already has a department focused on 3D printing, could buyout the company and improve their 3D printing business without taking on any leverage.
Along with the fact that both sides would benefit from a buyout, there is already a close relationship between the companies to lubricate any large transaction and ensure a smooth transition in an acquisition.