3D Systems paid more than three times the estimated revenue it expects to receive in 2013 for Morrisville-based Geomagic, the company disclosed in an SEC filing this week.
The South Carolina-based firm paid $55 million in cash for privately held Geomagic.
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3D Systems (NYSE: DDD) also said it expects the Geomagic business unit to produce $17 million in revenue through the end of the year.
The deal closed on Wednesday.
“Geomagic is a leading global provider of 3D authoring solutions including design, sculpt and scan software tools that are used to create 3D content and inspect products throughout the entire design and manufacturing process,” 3D Systems said in the filing. “The transaction adds complementary products and technology and increases the registrant’s reseller coverage globally.”
In a conference call on Monday to discuss its most recent financial results, 3D Systems executives told analysts they have big expectations for Geomagic.
“One thing that is important to note, we talked about the Geomagic acquisition that we expect to add $17 million this year in revenue and that’s a prorated number for the remainder of the year,” said Chief Financial Officer Damon Gregoire. “If we close that at this week, you are basically talking one month out of this quarter that is only in. So that has to be factored into that too.”
Ping Fu, chairman and chief executive officer of Geomagic, will join 3D Systems in an executive role and Geomagic will remain based in Morrisville, the companies have said.
In a press release, 3D CEO Avi Reichental praised the deal.
“This is an exciting development for us and our customers. With our combined portfolio, we are committed to enhance our customers’ processes and workflows, including capture, design, modify, inspect and interact,” Reichental said. “The completion of this transaction today marks the beginning of a journey to democratize access to our unmatched portfolio of powerful 3D content-to-print products and services for the benefit of professionals and consumers alike.”
During the earnings call, Reichental pointed out how the addition of Geomagic’s international operations would increase his firm’s global footprint.
“With the addition of Geomagic, we’re going to have another opportunity to add somewhere in the range of another 80 to 100 channel partners,” he said, according to a transcrpit provided by financial news website SeekingAlpha. “That gets us to now a channel of nearly 500 resellers and with that, we see that there’s lots of opportunity for cross selling and upselling and opportunities to generate incremental growth rate …”
The deal had been announced in January, but financial terms were not disclosed.
The companies are long-time business partners.
