3D printing is supposed to be the next big thing in manufacturing. The problem is that the leaders in the field have not grown as much as investors and consumers have expected. 3D Systems Corp. (NYSE: DDD) is looking to take advantage of a new network of companies in China, with its cheaper manufacturing costs, as one more avenue to generate growth ahead.
As a means for this entrance into China, 3D Systems announced that it acquired the Easyway Group of companies in China, creating 3D Systems China. Note that Easyway is a Chinese 3D printing sales and service provider with key operations in Shanghai, Wuxi, Beijing, Guangdong and Chongqing.
The terms of the transaction were not given.
As a Chinese company, Easyway has a few benefits that it brings to the table for 3D Systems. It has extensive and experienced China sales and service coverage, substantial service bureau production capabilities and key relationships with leading Chinese automotive, medical and consumer goods companies, including Volkswagen, Nissan, Philips, Omron, Black & Decker, Panasonic and Honeywell.
The acquisition provides 3D Systems with a strong platform to scale its in-country Quickparts custom manufacturing operations and multiplexes its 3D printing reseller coverage.
At the same time, 3D Systems China announced that May Zhou, Easyway’s founder, will lead this new company.
Avi Reichental, president and CEO of 3D Systems, commented on the acquisition:
We are thrilled to join forces with Easyway and together expand our business in China. With operations in key Chinese cities and well-established 3D printing sales and service bureau operations, Easyway represents the cornerstone of our expansion plans for China.
We believe that the strong relationship and strategic fit between our companies, combined with Easyway’s on-the-ground infrastructure, coverage and deep customer relationships, could present significant benefits for our customers, sizeable growth opportunities for us and long term value for our shareholders.
It is worth mentioning that 3D printing stocks as a sector have struggled recently. Specifically, 3D Systems shares ended last week less than a dollar above a 52-week low. 24/7 Wall St. noted this struggle all the way back in February.
At the same time, short sellers have been piling onto these companies as well. As of the most recent settlement date, over 38 million 3D Systems shares were short, or roughly 36.6% of its stock.
In Monday morning trading, shares of 3D Systems were up 2.5% at $28.13, in a 52-week trading range of $26.29 to $69.56. The stock has a consensus analyst price target of $36.37.