On Friday, Arcam AB (NASDAQOTH:AMAVF) entered into an agreement to buy the advanced powders and coatings division of Raymor Industries, a Canadian high-quality metal powder supplier, for around $33 million. Having been an Arcam supplier since 2006, this strategic acquisition complements Arcam's existing portfolio and secures access to a more stable supply of high-quality metal powders for its metal 3-D printers.

Raymor is regarded in the industry for offering some of the finest metal powders around. Its proprietary plasma atomization process allows it to create the purest and most spherical metal powders, ranging from 250 microns in diameter all the way down to 1 micron. Metal 3-D printing and powders have been growing in importance, especially in commercial aviation, which has recently begun exploring how to use metal 3-D printing as a way to manufacture parts that significantly reduce weight loads and improve fuel efficiency. General Electric recently reduced the weight of a 100-pound jet engine bracket that mounts the engine to the wing by nearly 84% -- all while maintaining its structural integrity.

Scrounging for cash
At the end of its third quarter, Arcam had only about $23.4 million in cash on its balance sheet. To fund this deal, Arcam will be tapping into a portion of cash and credit lines, and it may possibly raise more equity -- up to 400,000 additional shares to cover its finances. While I agree that this deal makes sense from a strategic standpoint, it may actually lead to shareholder dilution. This could be especially true after you consider the nearly 800% run Arcam's stock has experienced over the past year. To boot, shares currently trade at the sky-high valuation of 22 times trailing-12-month sales -- certainly on the higher side for 3-D printing sector.

A small company with big dreams
In the third quarter, the company shipped just four of its highly specialized 3-D printers, a decrease of one printer year over year. However, Raymor positions Arcam to grow into a much larger company that's specializing in 3-D metal printing for aerospace and orthopedic applications. While I admire the company's focus and promising technology, I don't necessarily believe it's a good time to invest in a company that's risen over 800% in the past 12 months. If you're an investor at today's levels, it's advisable to have an extremely long-term time horizon to ensure the company will be able to grow into what I believe are absurdly high investor expectations.

Fool contributor Steve Heller has no position in any stocks mentioned. The Motley Fool owns shares of General Electric. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.