Geomagic, a high-profile 3D software company with about 120 employees, is being acquired by a long-time business partner.
3D Systems, a publicly traded company based in Rock Hill, S.C., announced Thursday that it has agreed to purchase Geomagic for an undisclosed sum.
3D Systems produces three-dimensional printers that are used to create 3D objects out of plastic and other materials, and has been expanding rapidly thanks to strong organic growth augmented by a series of acquisitions. Software from Morrisville-based Geomagic, which was founded in 1996 and is privately held, creates 3D digital models that are used by 3D printers.
Geomagic co-founder and CEO Ping Fu will become chief strategy officer at 3D Systems when the deal is completed, which is expected to happen by the end of March. She has become something of a celebrity in the local business community, demonstrating the company’s technology for Jay Leno and promoting the interests of small businesses in a meeting with President Barack Obama.
Fu said she also will be general manager of the Geomagic unit of 3D Systems once the sale is completed. “Everyone at Geomagic will still be reporting to me,” she said.
Fu said that there will be no layoffs at Geomagic, adding that she expects the Morrisville work force to expand “drastically” as a result of the deal. Roughly 100 of Geomagic’s employees are in Morrisville.
Although Geomagic doesn’t disclose revenue numbers, Fu said that annual revenue growth has exceeded 20 percent over the past five years “despite very bad market conditions.”
Geomagic wasn’t seeking a buyer but was approached by multiple suitors, Fu said. She concluded that 3D Systems offered “a great strategic platform for Geomagic to grow faster.”
3D Systems generated $252.1 million in revenue over the first nine months of 2012 and posted $45.3 million in net income. In the third quarter its revenue rose 57 percent, with 26 percent of that being organic growth and the remainder resulting from acquisitions.
Shares of 3D Systems closed Thursday at $56.97, up $1.19. A year ago, its shares were trading at less than $16.
“We believe that this industry is going to be the next big thing,” Fu said. “Apparently the investors believe that also.”
Officials at 3D Systems couldn’t be reached for comment.
Abe Reichenthal, president and CEO, said in a statement that the two companies have complementary abilities in product development, marketing and other areas that will enable 3D Systems to offer “more affordable and user-friendly solutions that will delight our customers and could present long-term shareholder value.”