Arcam Orthopedic part
AP&C is an international manufacturer of high quality metal powders and has been a supplier of titanium powders to Arcam since 2006.
Arcam revealed today (December 13th) that the acquisition will total CAD 35 million ($32.84 million, £20.22 million) in a combination of upfront cash payments and instalments.
President and CEO of Arcam Magnus René said: "With this acquisition Arcam secures access to the optimum production of high grade metal powders for our customers and we also add technology and expertise in powder metal production for 3D printing in general and other advanced applications.
"This acquisition is consistent with our growth strategy, complements our technology and product portfolio and is immediately accretive. We are very pleased to welcome the skilled team at AP&C to the Arcam group."
Titanium powder is a key part of Arcam's offering to its wide customer base and this strategic business deal has secured the company access to high quality titanium powder for its customers' growing businesses.
AP&C uses proprietary Plasma Atomisation technology to produce metal powders where titanium alloy powder today is the largest product. A significant part of AP&C sales is to the 3D printing industry, while it also supplies the Metal Injection Moulding (MIM) sector, applications requiring powders for spray coatings and powders for HIPed components. Arcam and the team at AP&C intend to continue expanding the powder business and advance the Plasma Atomisation technology.
The AP&C division is expected to generate CAD 6.5 million of revenue during 2013 with an EBITDA result of about CAD 1.5 million. The acquired business, with currently 29 employees, will become a subsidiary of Arcam and continue operating with the existing management team.
The total purchase price amounts to CAD 35 million where a cash payment amounting to CAD 20 million will be paid on closing and the remaining part as two instalments to be made in 2015 and 2016 subject to certain targets being met. The acquisition is expected to have a positive effect on Arcam's earnings per share in 2014.
Closing of the acquisition is subject to customary closing conditions and is expected to take place in the first quarter 2014.
Financing is secured through existing cash and a bank credit facility. Arcam also has the possibility to issue up to 400,000 new shares through the authorisation given to the Board of Directors by the extraordinary general meeting held on December 6th 2013.
Viant Capital LLC has been acting as Arcam's M&A advisor in connection with the acquisition. Carnegie is acting as the Company's financial advisor.
Jacques Mallette, President of Raymor Industries and future President of Arcam's powder business, said: "With this deal we will be a part of the leading company in 3D printing in metals. Because of our long-term close cooperation with Arcam we know that this deal will give us a very good platform for continued growth in the 3D printing industry. Being part of a larger group will also help in accelerating growth to better service the overall metal powder market."
The above information has been made public in accordance with the Securities Market Act and/or the Financial Instruments Trading Act.
Arcam provides a cost-efficient Additive Manufacturing solution for production of metal components. The technology offers freedom in design combined with excellent material properties and high productivity. Arcam’s market is global with customers mainly in the orthopedic and aerospace industries. The company was founded in 1997 and is listed on NASDAQ OMX Stockholm, Sweden. Head office and production facilities are located in Mölndal, Sweden. Support offices are located in the US, UK, Italy and China.