General Electric Company GE intends to increase its ownership stake in Arcam AB from 76.2% to approximately 95%. The acquisition will be done by GE Sweden Holdings AB, a subsidiary of GE. It is a Swedish company within GE Aviation.
The shares will be acquired from private investment management firms Elliott Management and Polygon Investment Group at SEK 345 per share. The transaction is slated to be completed on the last working day of the year.
Arcam develops cost effective metal-based technologies that find commercial use in orthopaedic, aerospace and automotive sectors. Arcam is currently listed on NASDAQ Stockholm, Sweden. GE intends to purchase all remaining shares of Arcam utilizing the compulsory buyout procedure right given under the Swedish Companies Act. Later, GE intends to have Arcam delisted.
Earlier in September 2016, GE Sweden Holdings AB made a public cash offer to acquire all ordinary shares of Arcam for the first time. The company purchased 46% outstanding shares from shareholders and 30.2% from the open market, gaining a controlling interest in Arcam.
Since 2016, GE has made major investments in large 3D printing manufacturers like Arcam and Concept Laser. This has been done keeping in mind the huge potential of the 3D printing industry. The 3D printing market is expected to be worth $20.5 billion by 2020 according to research from Deloitte, and GE expects its 3D business to reach $1 billion by this period.
With such continued focus on emerging businesses, GE aims to revive its fortune in the future. GE is also undergoing drastic portfolio restructuring initiatives and even halved its dividend to improve liquidity. Shares of GE have underperformed the industry year to date, with an average loss of 45.1% significantly wider than a decline of 4.5% for the latter.
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GE currently has a Zacks Rank #5 (Strong Sell). Better-ranked stocks in the industry include 3M Company MMM, Raven Industries, Inc. RAVN and Bunzl PLC BZLFY, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
3M has a long-term earnings growth expectation of 10.2%. It has surpassed estimates thrice in the trailing four quarters with an average positive surprise of 2.5%.
Raven has an expected long-term earnings growth rate of 10%. It has exceeded estimates thrice in the trailing four quarters with an average beat of 25.8%.
Bunzl has an expected long-term earnings growth rate of 3.2%.
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