GE to buy ARCAM

53% premium. I took the money and ran. (I held my shares on the Stockholm exchange)

Similar terms available for holders of the ADR (AMAVF).

There’s aways a possibility of a better offer - but there’s also a chance of an unexpected hiccup.


GE Sweden Holdings AB (“GE”), a Swedish company within the GE Aviation operating unit and an indirectly wholly-owned subsidiary of General Electric Company, has today announced a public cash offer to the shareholders of Arcam to tender all ordinary shares (the “Shares”) for a consideration consisting of SEK 285 in cash per Share (the “Offer”), which corresponds to a total Offer value of SEK 5,855,776,725[1].

The Offer also includes a public offer to tender to GE all American depositary shares (each an “ADS”), each ADS representing the right to receive one Share. The ADS program is unsponsored and was set up without any involvement by Arcam. GE offers SEK 285 per ADS in cash.

The Offer does not include any rights granted by Arcam to its employees under any incentive program implemented by Arcam. GE has stated that they intend to procure fair treatment in connection with the transaction for participants in such programs. Accordingly, the Offer does not include the preference shares of series C in Arcam held by Arcam as hedge for delivery under Arcam’s incentive program. In line herewith, the Swedish Securities Council has, in a ruling on August 29, 2016 (ruling 2016:23), confirmed that the preference shares of series C in Arcam may be excluded from the Offer.

The Offer represents a premium of:

53.23 per cent to the closing price of SEK 186.00 per Share on Nasdaq Stockholm on September 5, 2016, the last trading day prior to the announcement of the Offer,
67.35 per cent to the volume weighted average price of SEK 170.30 per Share on Nasdaq Stockholm over the 30 trading days up to and including September 5, 2016.
The acceptance period of the Offer is expected to commence on September 7, 2016 and expire on October 14, 2016. GE has reserved the right to extend the acceptance period and, to the extent necessary and permissible, will do so in order for the acceptance period to cover applicable decision-making procedures at relevant authorities.

Completion of the Offer is conditional upon, amongst other things, GE becoming the owner of more than 90 percent of the total number of Shares in Arcam and the receipt of all necessary regulatory, governmental or similar clearances, approvals and decisions, including from competition authorities, in each case on terms which, in GE’s opinion, are acceptable. GE has reserved the right to waive these and other conditions for completion of the Offer.

The Board has, at the written request of GE, permitted GE to carry out a confirmatory due diligence review of Arcam in connection with the preparation of the Offer. In connection with such due diligence, GE has not received any non-public price-sensitive information.

Arcam has retained Carnegie Investment Bank AB (publ) (“Carnegie”) as financial adviser in relation to the Offer. Carnegie has supported the Board in its analysis, evaluation and assessment of the Offer. Arcam has retained Baker & McKenzie as legal adviser in relation to the Offer.

The Board’s evaluation of the Offer

The Board’s opinion of the Offer is based on an assessment of a number of factors that the Board has considered relevant in relation to the evaluation of the Offer. These factors include, but are not limited to, Arcam’s present position, the expected future development of the Company and thereto related possibilities and risks.

In the Board’s opinion, Arcam has a well-defined and viable strategy going forward with its unique Electron Beam Machines production method and its proprietary Plasma Atomization powder manufacturing. The Company has made significant investments during the last years and has grown considerably, both within the aerospace as well as the orthopedic implant industries. Arcam operates on a global market with strong business and growth potential. Furthermore, the Board believes that the Company has a well-developed and strong intellectual property portfolio which is of crucial importance for a company highly dependent on its patents within the Additive Manufacturing industry.

In terms of the Company’s long-term prospects, the Board believes that the demand for the Company’s technology for Additive Manufacturing of aerospace and orthopedic implant products and components will increase dramatically, meaning that the market has favorable long-term growth opportunities. As the market develops, more advanced technology is required, which benefits Arcam. Accordingly, the Board believes that the Company is very well positioned for the future.

However, in assessing the merits of the Offer, the Board has also considered that the Company, on the whole, has limited resources and that the Company operates in a demanding and regulated environment with long lead times. Further, the market for Additive Manufacturing is still rather immature and may become subject to technological leaps that may require substantial investments for Arcam in delivering on its business plan. GE has stated that Arcam’s strategy and offering align to GE’s vision of building its own expertise and capabilities in Additive Manufacturing to serve customers in the global industrial community. Further, GE has adequate resources in implementing and taking advantage of Arcam’s growth and business opportunities and will provide know-how and expertise to further leverage Arcam’s technology and to forcefully go to market with Arcam’s products and services.

In considering the Offer, the Board has also taken into account that the Offer has a premium in relation to recently traded prices.

In arriving at its recommendation, the Board has analyzed the Offer using the methods normally used for evaluating bids for listed companies, including Arcam’s valuation in relation to comparable listed companies and comparable acquisitions, the stock market’s expectation of the development of Arcam’s profitability and share price, and the Board’s expectation of Arcam’s long-term value based on expected future cash flows. In doing so, the Board has concluded that the Offer is fair from a financial point of view.

Under the Takeover Rules the Board is required, on the basis of GE’s statements in the Offer announcement, to provide its opinion of the effects the implementation of the Offer may have on Arcam, specifically employment, and its views on GE’s strategic plans for Arcam and the effects these may be expected to have on employment and the places where Arcam conducts its business. GE has in this respect stated:

“GE intends to maintain Arcam’s current operations and locations. GE believes the locations of all of Arcam’s operations provide strong business, operating and engineering talent as well as government and community support. GE plans to retain and develop Arcam’s current and valuable management and employees. GE further desires to amplify the speed and energy of Arcam’s entrepreneurial culture with GE’s world-class engineering and operational capabilities. GE does not intend to make any material changes for Arcam’s employees, including their terms of employment and the locations of business.”

The Board assumes that this description is accurate and has in relevant aspects no reason to take a different view. Consequently, the Board envisages that the Offer will not have any material impact on the employment of Arcam and the places where Arcam conducts its business.

Based on the above, the Board believes that the Offers recognizes Arcam’s growth prospects, as well as the risks associated with those prospects. Accordingly, the Board unanimously recommends the Arcam shareholders to accept the Offer.


I figured something like this might happen. Great move for GE, not necessarily so for ARCAM shareholders whose future potential is cut off.

The only other bidders might be other jet engine manufacturers.

Denny Schlesinger

First ARMH, now AMAVF … it is nice to get the premium, but why do they have to keep taking away my highest confidence holdings?

Yeah unfortunate but probably for the best. They might be quite accurate with the requirement for significant further assessments, and the technology/industry being relatively immature. Definitely was a nicely run company to own with futuristic technology for that feel-good factor. Unfortunately not even with this premium has the stock price hit the highs of 2013. I think Saul sold it somewhere in the 40s? His logic at the time was great as always, and in hindsight just perfect. I was too in love with the tech to follow suit. Mistake!

You all taking the money and running then? I am a little unfamiliar with buyouts.

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It will be interesting to see the EU reaction to this and whether they will push some EU company into making a bid. I think that is a possibility. Because GE is getting a patent tight monopoly on making titanium parts that nobody else can make.

Because the EU sank a lot of research money into EBM, and now this will go to benefit a US centered company. I always thought Arcam could not reach it’s full potential aa Swedish based company but a more central in the EU, maybe.

I discussed AMAVF here at much lower prices. In general with little interest from the board.

But it was my biggest investment and I made a bunch of money on it. A 57% increase in price overnight does that.


First ARMH, now AMAVF … it is nice to get the premium, but why do they have to keep taking away my highest confidence holdings?
I know it’s getting really annoying. I can add LinkedIn and LogMeIn to the conviction take out list for me and then there was Patriot National and a couple of take private actions in my China stock. Rrrrr.

I’m probably going to wait for any Go-Shop period to happen for the purposes of a competing offer before I sell. Maybe HP could be interested to secure a metal play!


Mauser, it was due to your posts on AMAVF that I purchased some in the 16s earlier this year. Thanks, your view on the stock has proven correct and I am certainly happy with the premium although we will never know how high she could have gone on her own.



First ARMH, now AMAVF … it is nice to get the premium, but …

tamhas - (and Ant)

I’d take it as a compliment (or even confirmation) that your eye for investing is spot on. The bigger companies in the industries you invest completely agreed with your thesis in each case. I guarantee that those companies spent ALOT of time and money to come to the conclusions that you did. That the company is a good buy - well done.

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I’m selling both my ARMH and AMAVF, both which have done well for me. The next question is where to invest these new dollars that are now available?

Softbank and GE?

AMAVF up another 5% this AM