Montreal: PyroGenesis Spins off 3D Printing Business into New Entity to Distribute Metal Powder Systems & Equipment
Montreal is soon to be home to a new manufacturer of metal alloys for 3D printing. As PyroGenesis, a clean-tech company specializing in the making and selling of plasma waste-to-energy systems and plasma torch products, spins off nearly all of their 3D printing business (80%), a new company will be born—and is temporarily being referred to as 3DCo for the sake of the impending contract.
The Board of Directors for PyroGenesis has unanimously agreed that they will spin off this portion of their business into an independent publicly-traded company to have a more formal name decided on at a later date. PyroGenesis is a TSX Venture company specializing in the Plasma Atomization Process, or PAP, which is used to create flowing, spherical metallic powders. The process is used to produce metal powders of titanium, niobium, nitinol, aluminum, and other reactive metals and alloys at rates of up to 150 kilograms per day. We have been following PyroGenesis for quite some time, and reported on their plans last year to file a patent for their 3D printable powder production process.
PyroGenesis will be transferring a great deal of its processes and technology over to the new 3DCo. They will have rights to use the Montreal-headquartered company’s patented technology, as well as distribute powder production systems and equipment under a global license. The deal sounds very black and white in terms of the two entities staying extremely connected while yet also serving as a tax-free transaction for shareholder purposes in Canada.
The company has stated too that much of this is still being finalized, but over the next four months shareholders will continue to own and to have control over all the issued and outstanding shares of both companies, either directly or indirectly.
While there is obviously a major transaction happening between the two companies, PyroGenesis will still continue to receive numerous benefits, by way of:
- Supplying systems and equipment to 3DCo with traditional margins
- Providing standard maintenance and technical support services to 3DCo for each system purchased, for up to $750K per system per year
- Receiving royalty payments of up to ten percent (10%) of powder production revenues from 3DCo
“Spinning off 3DCo will help attract an investor base best suited to the company’s unique value proposition, particular business operations and financial characteristics, thereby maximizing shareholder value and placing it in a better position to ramp up, generate revenues, and develop strategic relationships/partners than had it remained part of PyroGenesis,” said Mr. Peter Pascali, President and CEO of PyroGenesis. “As such, 3DCo will be able to sharpen its strategic focus and provide flexibility to capitalize on the unique growth opportunities within its market sector. At the same time, it will provide PyroGenesis with a source of repeat business and recurring revenues as well as an investment position in a vibrant public company.”
3DCo should be in production as its own commercial entity by the third quarter, and they see a second system arriving online by the first quarter of the next year. The goal is for 3DCo to operate as a premier provider of 3D printing metal powders that are of high quality and promise high performance.
Thanks to PyroGenesis, 3DCo will indeed be offering a superior technology to their customers with new metallic powders that will allow them to do things they simply could not previously. The system is flexible, easily adjusted, and can be made compatible for processing other metal wires and composites—another facet of its innovation.
“Our plasma atomization system produces powders of the highest purity, while being extremely spherical, and having a very narrow particle size distribution, making it ideally suited for the powder requirements of the growing 3D printing industry,” said Mr. Pierre Carabin, Director of Engineering of PyroGenesis.
“Building on our history of providing such powders to the biomedical industry (since before 2004), combined with our developed expertise and know how in metal powder production, our team of engineers have recently made significant improvements to our current technology, laying down the groundwork for future success.”
Pyrogenesis Canada Inc. is currently the world leader in design, development and commercialization of advanced plasma processes. They offer:
- Engineering and manufacturing expertise
- Contract research
- Turnkey process equipment for a wide range of industries
The company employs a team of engineers, scientists, and technicians who work in the Montreal headquarters. PyroGenesis is a publicly-traded Canadian company on the TSX Venture Exchange (Ticker Symbol: PYR) and on the OTCQB Marketplace (Ticker Symbol: PYRNF).
This current transaction is still under review but is expected to be completed by the third quarter.
“Defining, focusing and seizing opportunities have defined PyroGenesis from its inception,” said Mr. Pascali. “With the unanimous support of PyroGenesis’ Board of Directors, we are now taking the next logical step and spinning-off additive manufacturing with its distinct and compelling opportunities, all the while improving PyroGenesis’ financial returns. The Board’s decision to approve such a transaction reflects PyroGenesis’ ongoing commitment to implement bold changes to deliver sustainable growth and enhanced shareholder value.”
What do you think of this spinoff? Discuss in the PyroGenesis 3D Printing Spinoff forum over at 3DPB.com.
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