A global pandemic, supply chain disruptions, a European land war, inflation, and increased debt costs have all challenged financial markets around the world in recent years. And the opening shots of a trade war between the West and China could create even more turbulence in the years ahead.

Luckily, though, 3D printing (or additive manufacturing) should be able to absorb some of the shock, while creating an opportunity for dealmakers in Europe, the Middle East and Africa (EMEA) and further afield.

“The old-fashioned model, where you serve all the world’s markets from one large factory, is not viable anymore,” according to Alberto Onetti, chairman of innovation advisory firm Mind The Bridge. “There are wars, there are tariffs, and there is also the push towards delivering customized goods.”

In this context, 3D printing should be seen as “a golden egg,” Onetti said. “It’s the missing link between large-scale production and customized production.”

The last few years have seen large numbers of deals in the space in EMEA as players have tried to build scale to confront the opportunity, with Israeli companies leading the charge.

So far, 2024 has so far already seen eight deals worth EUR 584.9m. One significant deal was Nano Dimension [NASDAQ:NNDM], an Israeli supplier of 3D printing-related materials, which acquired a peer, Desktop Metal [NYSE:DM] of the US, for up to USD 183m at the beginning of the month.

This wasn’t Nano Dimension’s first rodeo. It made a bid for its peer Stratasys [Nasdaq: SSYS] at the end of last year. Nano is already the largest single shareholder of Stratasys with a stake of 14% and a first approach was rejected by the target’s board the previous July.

Strange year

The most impressive year so far was 2021 as dealmakers struggled with fragile supply chains in the wake of the COVID-19 pandemic, according to Mergermarket data. There were 44 deals in 2021 with aggregate volumes of EUR 4.7bn, up sharply from EUR 1.2bn across 29 deals in 2020. In 2022, the number of deals and their disclosed value decreased to 34 transactions worth EUR 906m, but in 2023 the total jumped again to 29 deals worth EUR 1.24bn.

The high watermark year of 2021 was unusual across all sectors, Onetti said. Whether or not volumes return to that level in the near term, capital will continue to flow into additive printing and the sector will continue to consolidate, he said.

One significant deal came at the end of 2023. Enovis Corp [NYSE: ENOV], a US-based orthopedic products maker, announced that it has agreed to acquire an Italian orthopedic implant solutions provider LimaCorporate for EUR 800m in enterprise value. Lima brings 3D printed surgical products to the table.

Although large international additive manufacturing players, particularly the ones from Israel, are in demand with investors, it’s generally challenging for other EMEA players to achieve both the innovation level and scale to compete globally.

This is particularly true in the low-budget segment, where European players have to compete with Chinese peers supported heavily by the government, according to Andrzej Burgs, chairman and CEO of Sygnis SA of Poland.

“The sector is growing, but the players are struggling,” Burgs said, adding that Europe is particularly challenging as the market is very fragmented. Smaller players avoid burning cash, which is necessary to innovate, he said, adding that this could drive consolidation and the search for investors with deep pockets.

Consolidation candidates

Companies to watch in the space include Litix [BIT:LTX], an Italian developer of robots used for sculpting marble, which also provides software development for additive manufacturing. The company could consider strategic acquisitions that could help with its growth plans, according to CEO Giacomo Massari.

Another example is a Spanish manufacturer  of  3D printers, Meltio, which wants to engage with advisors after the European summer before it makes a decision on its long-term corporate strategy, according to CEO Ángel Llavero. Meltio has attracted approaches from private equity and venture capital firms, as well as advisory pitches for IPOs, deals with special purpose acquisition companies (SPACs) and corporate bonds.

Meanwhile, ARMOR GROUP, an international industrial-components manufacturer from France, aims to consolidate the sustainable printing market in Europe, CEO and Chairman Hubert de Boisredon said. The group comprises of several subsidiaries, one of which is KIMYA, which develops components and materials for additive manufacturing.

Although the sector faces multiple challenges, the push towards local production combined with the demand for customized products delivered fast will continue to provide a backdrop for consolidation. And these trends could accelerate if a trade war with China continues to escalate.