EarningsNot surprisingly, while a lot of us were at PTC’s Live Global user conference in Anaheim this week, everyone else was doing … whatever they were doing. And that, it turns out was quite a bit.

3D Systems Acquires (Most of) Phenix Systems

3D Systems makes what are commonly called additive manufacturing printers, where layers of material are built up until the part reaches the size of the desired, finished object. 3D Systems’ printers have, so far, always used plastic which put it a bit behind the curve in a world that increasingly wants to make real parts, not prototypes.

The company just found a solution, announcing that it would acquire a tad under 80% of Phenix Systems, a French provider of direct metal selective laser sintering printers. Phenix manufactures and sells a proprietary printer  that prints “chemically pure fully dense metal and ceramic parts from very fine powders with the granularity of 6 to 9 microns”. [Terms like “chemically pure” and “very fine” need quotes. — Ed.] To date, these powders include stainless steel, tool steel, super alloys, non-ferrous alloys, precious metals and aluminum oxide (aka alumina). 3D Systems expects to this process to be very attractive to customers in aerospace, automotive and patient-specific medical device companies.

The acquisition of that 80% stake is subject to conditions and is expected to close in July. After that, it gets complicated. 3D Systems intends to launch a take-over bid for the remaining 20% of the shares of Phenix Systems, and then initiate what it calls a “squeeze-out procedure” if it gets to 95% of total shares or voting rights during the second half of 2013. It does not sound friendly and one has to wonder about the dynamics behind the deal.

The maximum price payable by 3D Systems for the 80% block is €13 per share. I wasn’t able to quickly find the total number of outstanding shares, but the NYSE Euronext website lists the company’s market capitalization at €14 million, so it looks as though the first part of the deal totals about €11 million or $15 million. That €13 per share represents a 120% premium on Phenix’s closing price before news of the deal broke.

Phenix has bumpy financial record. So far, 2013 is looking good, but the company reported revenue of €3.75 million in 2012, which was down slightly from 2011, which was down a lot from €5.9 million in 2010. For 2102, Phenix reported a net loss of €1.89 million. Even so, 3D Systems expect Phenix to be accretive to the company’s non-GAAP earnings in the first full year following the close of transaction.

I haven’t seen a Phenix PX machine in action, but experts tell me that it’s pretty unique. It brings a direct metal technology to the 3D Systems portfolio which lets it better serve industrial customers who want to move this technology out of the design shop and into manufacturing.

We should learn more about it all on Monday, at the 3D Systems investor event.