Marking its third acquisition this month, and sixth deal since August of this year, 3D Systems (NYSE: DDD) announced today it has signed a definitive agreement to acquire the product design, engineering, and chemistry group of Xerox (NYSE: XRX) in a $32.5 million, all-cash deal. At the end of its third quarter on Sept. 30, 2013, 3D Systems had $345.4 million in cash and equivalents.
In addition to the products and other assets the engineering group acquisition includes, 3D Systems said it will also add "more than 100 experienced Xerox engineers and contractors specializing in product design and materials science to its global R&D team." As soon as the transaction closes, which both parties expect will be by year's end, 3D Systems will begin operating its own facility located at Xerox's Wilsonville, Ore., campus.
According to the companies, Xerox will "maintain ink and print head development resources along with research relevant for digital printing and the 3D markets." 3D Systems plans to increase its annual R&D expenditures by "approximately 75% to 100% over the next few years as it completes certain Xerox related engineering services commitments and fully leverages its expanded capabilities."
Commenting on the deal, 3D Systems President and CEO Avi Reichental said in a press release, "This bold step is consistent with our belief that we must act quickly and decisively to extend and cement our marketplace leadership position by taking full advantage of the window of unprecedented opportunity in front of us."
President of Xerox Strategic Growth Initiatives Kevin Warren added that the deal "emphasizes how we are leveraging our expertise while we continue to evolve our business model and pursue strategic growth opportunities."
Xerox and 3D Systems are well acquainted, having partnered on numerous projects and product development initiatives for 15 years. The deal is subject to customary closing conditions.