3D Systems announced the sale of their Geomagic software line, which has some interesting implications.
Geomagic is a line of 3D software tools that can be used to produce highly refined 3D scans, design complex 3D models, and perform 3D inspection. The company began way back in 1996 but was acquired outright by 3D Systems in 2013.
That period was the heyday of 3D Systems’ massive acquisition spree, where they scooped up dozens of 3D print or adjacent companies. Most of those acquisitions simply faded away into 3D Systems, but some, like Geomagic, retained their branding.
Now Geomagic has been sold to Hexagon for US$123M, with the deal to close in 2025. This includes the following tools:
- Geomagic Design X
- Geomagic Control X
- Geomagic Freeform
- Geomagic Wrap
The acquisition makes perfect sense for Hexagon, a company that already has a suite of 3D software tools — and a distribution network to customers that might also be interested in Geomagic. The scan-related functionality of Geomagic will knit directly into Hexagon’s products.
But what’s the benefit here for 3D Systems? In their press release, they explain this:
“Following the divestiture, 3D Systems will focus on its software platforms that are core to customer adoption and application of its 3D printing technologies. These specifically include 3D Sprint, 3DXpert, and Oqton Industrial Manufacturing OS, each of which brings unique value to customers targeting large-scale, production applications. By concentrating development resources on these platforms, 3D Systems believes it can accelerate its strategic software development efforts and augment its product offerings to empower customers to unlock the full potential of AM. This focus is particularly important in order to increasingly leverage the capabilities of AI and machine learning, as these powerful new tools become more accessible to companies targeting high-reliability production environments and other critical industrial settings. By focusing on these high-ROI, mission-critical software offerings, the Company will better enable the widespread adoption of additive manufacturing, significantly enhancing customer and shareholder value.”
That all makes quite a bit of sense. But is there another reason for this divestiture?
Let’s look at the company over the very long term to gain a perspective.
During the 2010s, the company acquired dozens of other operations, and that is extraordinarily challenging for management. It’s a huge amount of work to absorb another company, let alone dozens of them. 3D Systems has divested themselves of only a few of these acquisitions, mostly since the management changed a couple of years ago.
It may be they also want to cash in on their investment in Geomagic. 3D Systems’ net income has been consistently dropping since at least 2019, with the exception of 2021, which was positive due to similar divestitures. It may be the same approach is taking place here.
The company cannot continue to post net income losses year after year, and they’ve been taking steps to generate cash in various ways. This could be another one.
Via 3D Systems
