3D Systems Acquires Maker of Low-Priced 3-D Printers

In a movethat shows the dramatic transformation of the rapid prototyping market, 3D Systems of Rock Hill,SC, announced the acquisition of BitsFrom Bytes, a producer of low-end 3-D printers.

Bits FromBytes produces open-source kits and printers ranging in price from$1,300-$3,900 based on the RepRapproject that originated at the University of Bath in England.

Printmaterials include ABS and polylactic acid (PLA) in solid and translucentcolors, polypropylene and polyethylene.

In its firstfull year of operations, Bits From Bytes kits and printers grabbed 17 percentof all 3-D printer unit sales worldwide, ranking second in total shipments toStratasys, whose patent on the fused deposition modeling system of 3-D printinghas expired. In a conference call discussing the acquisition, 3D Systems' CEOAbe Reichental described the Bits From Bytes technology as one of several"clones" of the FDM system. The market share estimate was made by the Wohlers Report.

A commercialversion of one of the new machines was on display at Rapid2010 at a price of just under $4,000, less than half the price of theleast-expensive 3-D printer previously on the market.

Reichentalsays there are three markets for the low-priced printers: educational, hobbyistand small businesses.

"With theacquisition of Bits From Bytes, 3D Systems takes the next major step towardsdemocratizing access to 3D printing - a stated strategic direction and ongoingcommitment," said Reichental.

Designengineers at large companies tend to use 3-D printers with greaterfunctionality from companies such as Stratasys, Z Corp., Objet Geometries, andeven 3D Systems, which last year launched an inexpensive printer called the VFlash.

The majorplayers have tried to leapfrog each other with lower-priced offerings. Anotherbig change in the market is the emergence of Hewlett-Packard as the exclusive marketerof 3-D printers made by Stratasys in five Europe countries. H-P's franchisecould extend globally.

"Powered by3D Systems technology, marketplace presence and financial flexibility, BitsFrom Bytes products can reach new audiences, address new applications and opennew channels and geographies that are begging for open source access and functionality,"said Ian Adkins, managing director, Bits From Bytes Ltd.

The price ofthe acquisition was not disclosed. Reichental told analysts that annual salesof Bits From Bytes are well under $5 million despite its significant shipmentlevels.

3D Systemsplans to retain the entire Bits From Bytes management team led by Adkins, andto continue operations from the current Bristol, England, facility.

3D Systemswas one of the companies that developed the rapid prototyping industry in the1980s with the invention of a technology called stereolithography, in whichlasers create a three-dimensional shape from photopolymers on a movingplatform. The lasers are driven by CAD files.

In the lastdecade, the industry has moved in two different directions. One is the trend toinexpensive printers, which operate with specialized materials as well asspecific thermoplastics. The second is the move to high-end systems thatproduce intricate parts from plastic or metal for low-volume productionrequirements.

3D systemsreported a first-half profit of $4.8 million on revenues of $66.8 millionversus a loss in the 2009 period of $3.4 million on revenues of $48.7 million.