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April 11, 2014 02:00 AM

3-D printer firms beef up, build supply chain

Bill Bregar
Senior Staff Reporter
Michael Lauzon
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    Driven by prospects for direct manufacturing of finished products, makers of 3-D printing equipment are moving to buy add-on companies like additive manufacturing service providers and materials development firms.

    The latest news: Stratasys Ltd. has purchased a materials specialist, Interfacial Solutions LLC of River Falls, Wis.

    That move, announced April 4, comes just two days after Stratasys said it was buying two service providers, Solid Concepts Inc. of Valencia, Calif., and Harvest Technologies of Belton, Texas. They will be under Stratasys' digital manufacturing service business, called RedEye.

    On April 2, the same day as Stratasys' announcement about the service provider deals, competitor 3D Systems Corp. said it has acquired Medical Modeling Inc. a pioneer in using the technology for reconstructive surgery. Earlier this year, 3D Systems bought Xerox Corp.'s solid ink engineering and development operation and Gentle Giant Studios, which uses 3-D printing to make licensed characters from movies and other entertainment properties.

    Late last year, 3D Systems bought Village Plastics Co., a Norton, Ohio, extruder of plastic filaments used in rapid prototyping.

    Additive manufacturing is evolving into “real” production, not just low-volume prototyping and pre-production, said Tim Caffrey, senior consultant at Wohlers Associates Inc. in Fort Collins, Colo. “With true final part production, volumes go from one or 100 to 1,000, 50,000, or more. These companies are responding to this development by trying to consolidate entire supply chains related to production applications: The company that makes the feedstock, the AM machines, and the facilities that manufacture the parts,” he said.

    In other recent news, Voxeljet Technology GmbH, a German company, announced it would set up a U.S. site in Canton, Mich., to print on-demand parts, molds, cores and models for automotive and industrial customers.

    Also this month, ARC Group Worldwide Inc., a 3-D printer and metal injection molder in Deland, Fla., bought two companies in Colorado: Advanced Tooling Concepts LLC, a plastic injection molder and tool maker; and magnesium molder Thixoforming LLC.

    Minneapolis-based Stratasys did not disclose terms of the deal to buy Interfacial Solutions.

    Interfacial develops materials and processes, and does low-volume compounding and reactive extrusion. Stratasys has been a customer of Interfacial Solutions for the last three years.

    Interfacial President Jeff Cernohous said Stratasys plans to retain all 40 employees and continue to run the operation in River Falls. Cernohous, who founded the company in 2003, will continue to run it day to day.

    Cernohouse said Interfacial is well positioned to help Stratasys develop new materials faster. He described his business as an “idea-to-production materials development company” that works on 3-D printing and other areas, such as “green” materials.

    “We're really a material science house that does specialty compounding,” he said.

    Material development is an important skill, because the additive manufacturing industry changes so fast. Not too long ago, 3-D models tended to be fragile. Parts made by the process, which used to be known as stereolithography and rapid prototyping, could shatter if dropped. Product designers could use them to show form and fit.

    The technology has steadily advanced with new materials and processes like engineering plastics, metals and ceramic materials. Some printers use bonded sand to form molds for metal castings. The developments have helped fuel interest in direct manufacturing, using 3-D printing to turn out one-of-a-kind parts such as hearing aids, dental braces, prosthetics, aerospace parts and molds for automotive intake manifolds.

    Stratasys, which is traded on the Nadaq stock exchange, also announced this week that it has developed a 3-D printing material that “simulates” polypropylene. That opens up new areas such as living hinges and snap-fit lids.

    Those types of applications have excited interest in the general public and investors.

    Some important applications are less sexy, but still critical for factories. “These end-use parts are the ones that people get excited about, and rightfully so. But in addition to that, the use of jigs and fixtures in the manufacturing process is a big driver,” said Jon Cobb, Stratasys' vice president of corporate and government affairs.

    Buying a company with materials expertise will help Stratasys become vertically integrated in materials development and manufacturing, said Stratasys CEO David Reis.

    Officials of 3D Systems said their recent acquisitions strengthen the company, as well. Medical Modeling is makes patient-specific medical devices that are approved by the U.S. Food and Drug Administration.

    “The combination of our rapidly growing healthcare business with Medical Modeling's expanding range of products and services creates the largest 3-D printing-based personalized surgery and patient-specific medical device service capabilities available today,” stated 3D Systems President and CEO Avi Reichental in a news release.

    3D Systems is based in Rock Hill, S.C.

    3D Systems' purchase of Medical Modeling is not a new direction for the company, a spokeswoman said via email. “We have been in parts production for nearly 5 years,” stated Stacey Witten. “It is an important part of our business model, also serving as a lead generation and brand relationship building tool.”

    Medical Modeling has helped tens of thousands of patients for implants, surgical planning tools and other design services, the company said. 3D Systems will consolidate its healthcare activities into a single unit headed by Andy Christensen, former Medical Modeling president and 3D Systems' new vice president of personalized surgery and medical devices. Medical Modeling has been using most of 3D Systems' technology, including modeling software and 3-D printers.

    Voxeljet Technology, of Augsburg, Germany, picked Michigan for a U.S. 3-D printing plant because of its proximity to much of the U.S. auto industry and its supply chain, explained Voxeljet CEO Ingo Ederer in a news release.

    The German firm expects to set up in Canton in the third quarter of 2013 and will employ 15 to 20 within the first three years of startup.

    See related story here: Reality may be pulling back on 3-D investors' expectations — and cash

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