Juicy bid – more to come – Business World

     The Board of Arcam has unanimously recommended that shareholders of Arcam accept GE’s offer.

A juicy cash offer for Arcam from the industrial giant General Electric, which also places a bid on Arcam’s largest competitor. It can force more buyers. Hold on to your shares, the risk that the bid withdrawal is minimal.

General Electric through a subsidiary added a juicy cash offer 3D printing company Arcam. The offer of 285 kronor per share represents a premium of 53 percent compared to yesterday’s closing price of 186 crowns. The bid values ​​Arcam 5.9 billion.

The Board of Arcam has unanimously recommended that shareholders of Arcam accept GE’s offer.

With the offer price of 285 crowns valued Arcam share to p / e 94 and 58 on the Business World forecasts from our analysis in June (No. 22/2016). Adjusted for net cash ports EV / EBIT of 68 and 42 on our estimates.

Valuing Arcam’s not easy. The growth potential has always been tickling in Arcam, although new orders for the company’s EBM machines periodically have been weaker, such as during the first half of this year. Much, therefore, suggest that we are indeed facing an inflection point where the Arcam starting line up volume orders from both the implant as the aerospace industry, where General Electric is a major customer in the latter category. This is supported by several external industry analysts who expect that the market for additive manufacturing will increase sharply in the future. The average growth is expected for the next few years be at least 30 percent per year.

To have such good growth prospects and profitability is increasing in the years to come is almost unique in the market. With a P / E ratio closer to 100 and EV / EBIT 68 shareholders may significantly paid. But there is no rush to sell shares. During the morning la GE also a bid for Arcam’s largest competitor, German SLM Solutions, with a premium of 37 percent compared to yesterday’s closing price. Based on analysts’ forecasts in the database Factset SLM valued at P / E of 98 and 53 in 2016 and 2017. It is thus in the same county as the Arcam.

The risk that the offer be withdrawn should be regarded as very small. The reason is that General Electric has bid on basically the only two publicly traded pure-3d-printing manufacturers that are relevant to the industry. American 3D Systems and Stratasys are not competitors to the Arcam and SLM when the American players are primarily targeting private customers. In other words, it is not unreasonable to believe that GE’s parallel bid this morning, forcing a number of industrial players to act. As a shareholder, it is thus worth the wait in any competing offer.

GE’s generous bid for Arcam and German SLM Solutions bördessutom seen in light of the financing cost for large companies is extremtlåg and that the US dollar is strong. The US currency harstärkts relative to the euro and the Swedish krona which the ECB and the Riksbank has been meraggressiva with its monetary policy than the Fed. Because the Chinese currency ärdelvis pegged to the dollar, it has also led to Chinese companies’ appetite påutländska company has been at record levels in 2016. Recent examples are the commandments påtyska robot manufacturer Kuka and Swiss chemical giant Syngenta. See also this week’s graph in the business world No. 34/2016.

To further quality Swedish companies in the hightech bought out from the Stockholm Stock Exchange is of course sad. But thank primarily the central banks of the artificially low cost of capital triggered denpågående budfesten.