AMS Spring 2023

Nikon Closes Deal to Acquire SLM Solutions, Becomes a Metal 3D Printer Manufacturer


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Japanese optics and imaging multinational Nikon (TYO: 7731) announced that the company has closed on its acquisition of SLM Solutions (AM3D.DE), a German manufacturer of hardware for metal additive manufacturing (AM). The acquisition, totaling €622 million (~USD$675 million), was first announced by Nikon at the beginning of September, 2022.

Nikon continued on an AM sector spending spree in the two weeks following the announcement of its SLM acquisition. In addition to investing in Texas-based Hybrid Manufacturing Technologies, the Japanese conglomerate bought a stake in Optisys, a company headquartered in Utah that designs metal AM applications for antennas and other radio frequency (RF) components.

Porsche’s E-drive housing, printed on SLM’s NXG XII 600

In a press release announcing Nikon’s finalizing its acquisition of SLM Solutions, Nikon’s CEO, Toshikazu Umatate, commented, “We value SLM’s capabilities in the metal [AM] space, and together we can provide holistic solutions at an accelerated pace to customers in a variety of industries around the world. We look forward to enhancing and growing our digital manufacturing business, which we are confident will lead to a revolution in global mass-production.” SLM’s CEO, Sam O’Leary, added, “With its deep expertise in developing cutting-edge opto-electronic technology and precision equipment, Nikon is the perfect partner for SLM. Together with Nikon, we will further strengthen our leading position in metal [AM] through consistently raising the bar in this innovation-centric environment.”

Earlier this week, in an editorial for titled, “Will Nikon’s SLM Solutions Deal Go through?”, AM consultant Tali Rosman addressed the acquisition’s arbitrage spread, the gap between the proposed share price and the current share price. The consultant pointed out that, although Nikon’s bid for SLM was at €20 a share and the stock was trading at around €17 at the time she wrote the article — yielding an arbitrage spread of around 15 percent — this is still only a bit higher than the 5-10 percent that is typical in such deals. Rosman concluded that, if the deal had truly been at risk, “we would have seen a bigger spread.”

Given the finalization of the deal, that analysis seems to have been sound. It is also worth pointing out that, given the high volatility of global markets last year, being “off” by 15 percent with four months lead time doesn’t seem like much of a misfire. That is especially the case, given the fact that it seems far more likely that AM companies are currently being undervalued rather than overvalued, above all concerning companies like SLM, with almost two decades of experience.

Aside from its willingness to put serious money behind it, the most notable aspect of Nikon’s burgeoning AM portfolio is its geographic reach. Combined with the company’s 2021 purchase of Southern California-based Morf3D, Nikon now has an AM foothold in at least three US states, as well as in Germany.

Considering that it is a Japanese company that is making all these moves, the significance of Germany, California, and Texas (Hybrid Manufacturing Technologies’ home base) to the global EV manufacturing supply chain can’t be overlooked. Nikon now seems to have put together many of the necessary ingredients for printing both semiconductors and automotive components, so anyone interested in the progress of AM for transportation should keep a close eye on how the company’s advanced manufacturing portfolio progresses from here.

Images courtesy of SLM Solutions

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