3D Systems Target Price $75

DDD : NYSE : US$51.83 BUY 
Target: US$75.00

3D Systems is a leading provider of rapid 3D printing,
prototyping and manufacturing solutions used to create
product concept models, precision and functional
prototypes, master patterns for tooling, and end-use
production parts for direct manufacturing. 3D Systems’
products allow complex three-dimensional objects to be
manufactured directly from computer-aided design and
manufacturing (CAD/CAM) software tools

Transportation and Industrials — Manufacturing Technology

Investment recommendation
DDD announced an important acquisition, naming Belgium-based metal
service bureau LayerWise as target in a deal whose terms are
undisclosed. We view this deal as positive for DDD on several fronts.
First, LayerWise has its own line of proprietary metal 3D printers. These
printers are used internally in the company’s service bureau operation,
but could be commercialized as a separate line of metal printers, or
integrated into the Phenix line to augment the capabilities of those
machines. Second, LayerWise has developed meaningful IP around the
efficient running of a service bureau focused on serial production of
metal parts including in-process inspection that drives quality assurance
levels especially critical in aerospace. Lastly, LayerWise extends DDD’s
footprint in the medical space where the company has recently focused
its acquisition activity, most notably with Medial Modeling. We reiterate
our estimates and $75 price target, and expect next week’s IMTS show
to shed additional light on DDD’s opportunities in metal 3D printing.
LayerWise a complementary metal 3D printing acquisition
 DDD announced the acquisition of Belgium-based LayerWise.
LayerWise is a provider of advanced metal 3D printing and
manufacturing services. They have a proprietary line of DMLS metal
3D printers targeted at aerospace, high precision equipment,
medical and dental customers.
 Terms of the transaction were not disclosed and DDD expects the
acquisition to be immediately accretive to cash generation.

DDD’s price target of $75 is 8x our C2015 sales estimate of $1002.5 million


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