On July 1, 2023, the Company completed the previously announced acquisition of Wematter AB (“Wematter”), a Swedish 3D printer manufacturer that will broaden 3D Systems’ Selective Laser Sintering (SLS) portfolio. Wematter's reported results are expected to be included in our Industrial Solutions segment. The acquisition resulted in the Company acquiring 100% of the outstanding voting interest of Wematter. Consideration for this acquisition consisted of approximately $10,224 in cash, subject to customary post-closing adjustments. The Company also may be required to pay an additional €2,000 in cash, contingent upon the achievement of certain post-closing performance conditions and the continued employment of certain key Wematter employees for two years after the closing date. If earned, the €2,000 is expected to be recognized as compensation expense over the two-year service period that the key employees must remain employed at 3D Systems. As of September 30, 2023, management believes that the achievement of the post-closing performance conditions is probable and, accordingly, the Company has commenced the recognition of the related compensation expense. In addition, the Company incurred $847 of acquisition-related expenses that are reported in selling, general and administrative expenses in the condensed consolidated statements of operations.

In a separate transaction, the Company had extended a loan to Wematter during the three months ended June 30, 2023. The carrying value of the Wematter loan was $942 as of the acquisition date, and was previously reported in prepaid and other current assets on the Company's condensed consolidated balance sheet as of June 30, 2023. Upon the close of the acquisition, we determined that the loan was effectively settled in the business combination as a preexisting contractual relationship. No gain or loss was recognized in connection with the effective settlement, as the carrying value of the loan was not materially different from the pricing for a current market transaction for similar items. The effective settlement of this loan receivable results in an increase to the consideration transferred in connection with this transaction (i.e., above the cash consideration paid) and a corresponding increase to goodwill.

We accounted for the acquisition of Wematter using the acquisition method, as prescribed by ASC 805, “Business Combinations” (“ASC 805”). In accordance with valuation methodologies described in ASC 820, “Fair Value Measurement” (“ASC 820”), the acquired assets and assumed liabilities were recorded at their estimated fair values as of the date of the Wematter acquisition.


(in thousands)
Current assets, including cash acquired of $148			$	835
Intangible assets:
Trade names	$	1,487
Product technology	2,231
Customer relationships	347
Total intangible assets			4,065
Goodwill			6,878
Other assets			475
Liabilities:
Accounts payable and accrued liabilities	$	794
Long term liabilities	293
Total liabilities			1,087
Net assets acquired			$	11,166

The goodwill recognized is attributable to synergies that are expected to enhance and expand the Company’s overall product portfolio and opportunities in new and existing markets, future products that have yet to be determined and Wematter’s assembled workforce. This goodwill is not expected to be deductible for tax purposes.

As of September 30, 2023, the purchase price allocation for Wematter is preliminary. The Company continues to review the final closing balance sheet of Wematter and may further adjust the acquisition-date fair values of acquired assets and assumed liabilities based on this review. The Company also continues to review Wematter’s pre-acquisition tax returns to determine the final tax positions, including net operating losses and any required valuation allowance. The final purchase price allocations will be completed when the Company has finished its valuation activities and the review of Wematter’s closing balance sheet and the pre-acquisition tax returns. These final allocations could differ materially from the current preliminary allocations. The final allocations may include (1) changes in the preliminary allocations to acquired intangible assets and goodwill and (2) changes in the preliminary allocations to other assets and liabilities, including but not limited to tax assets and liabilities, inclusive of deferred taxes. The estimated useful lives of acquired intangible assets are also preliminary.

The following unaudited pro forma financial information summarizes the combined results of the Company and Wematter as if the acquisition had occurred on January 1, 2022. The pro forma results have been prepared for comparative purposes only, and do not necessarily represent what the results of operations would have been had the acquisition been completed on January 1, 2022. In addition, these pro forma results are not intended to be a projection of future operating results and do not reflect synergies that might be achieved.

The unaudited pro forma financial information includes adjustments for the pro forma impact of our preliminary purchase price allocation, including the amortization for newly acquired intangible assets, the impact of transaction costs, and the alignment of accounting policies. Transaction costs have been included in the pro forma results for the periods ended September 30, 2022, consistent with the pro forma assumption that the acquisition occurred on January 1, 2022. Pro forma revenue information has not been presented, as pre-acquisition revenue reported by Wematter was not material and, accordingly, the impact on our reported consolidated revenue also would not have been material. Pro forma net loss is not presented in the table below for the three months ended September 30, 2023 because Wematter's results are reflected in 3D Systems consolidated numbers for the full period.

On October 4, 2022, we completed the acquisition of 100% of dp polar GmbH (“dp polar”), a German-based designer and manufacturer of a manufacturing system designed for true high-speed mass production of customized components, for $25,866 (including customary post-closing adjustments), which includes $19,604 paid in cash at closing, $7,091 paid at closing via the issuance of the Company’s common stock, and a provisional $829 estimated post-closing purchase price adjustment due to the Company from the sellers. See Note 12 for the discussion of an earnout arrangement with a key individual from dp polar.

The Company acquired dp polar for access to dp polar's patented continuous printing process. Central to dp polar’s patented continuous printing process is a large-scale, segmented, rotating print platform that eliminates the start/stop operations of virtually all additive manufacturing platforms. With dp polar’s technology and patented polar coordinate control, the print heads remain stationary above the rotating platform, providing a continuous print process.

We accounted for the acquisition of dp polar using the acquisition method, as prescribed by ASC 805. In accordance with valuation methodologies described in ASC 820, the acquired assets and assumed liabilities were recorded at their estimated fair values as of the date of the dp polar acquisition.


(in thousands)
Current assets, including cash acquired of $243			$	301
Intangible assets:
In-process research and development	$	4,989
Trade name	3,930
Total intangible assets			8,919
Goodwill			17,090
Other assets			765
Liabilities:
Accounts payable and accrued liabilities	$	364
Deferred tax liability	845
Total liabilities			1,209
Net assets acquired			$	25,866

The goodwill recognized in connection with this acquisition is attributable to synergies that are expected to enhance and expand the Company’s overall product portfolio and opportunities in new and existing markets, future products that have yet to be determined and dp polar’s assembled workforce. This goodwill will not be deductible for tax purposes.

On April 1, 2022, we completed the acquisition of 93.75% of Kumovis GmbH (“Kumovis”) for an all-cash purchase price of $37,875 (including customary post-closing adjustments), plus an estimated RNCI of $1,559. $3,628 of the cash payment was deferred for up to fifteen months from the closing date, and was paid in July 2023. Kumovis, which is part of the Healthcare Solutions segment and reporting unit, utilizes polyether ether keton or “PEEK” materials, which has properties that lend it to many medical applications that fit into our personalized healthcare solutions operations, including many implant applications.

In conjunction with the Kumovis acquisition, the Company and the non-controlling shareholders entered into a put/call option agreement, whereby, at a later date, the Company has the option to purchase from the non-controlling shareholders, and the non-controlling shareholders have the option to sell to the Company, the remaining 6.25% ownership interest in Kumovis for an exercise price calculated based on the achievement of pre-determined revenue and gross profit targets. Fifty percent of the Kumovis common shares related to the put/call can be exercised upon the achievement of an initial revenue and gross profit target, while the remaining 50% can be exercised upon the achievement of a second revenue and gross profit target. If one or both sets of targets have not been met within 5.75 years from the acquisition date, there is a floor strike price that must be exercised. Up to 50% of the exercise price can be paid in Company common stock at the election of 3D Systems. This arrangement results in the recognition of RNCI, for which an estimated fair value of $1,559 was recorded as of the acquisition date.

We accounted for the acquisition of Kumovis using the acquisition method, as prescribed by ASC 805, and we have completed the allocation of the final purchase price. In accordance with valuation methodologies described in ASC 820, the acquired assets and assumed liabilities were recorded at their estimated fair values as of the date of the Kumovis acquisition. The table below reflects the fair value of both the consideration transferred and the RNCI attributable to this acquisition:


(in thousands)
Current assets, including cash acquired of $125			$	1,407
Intangible assets:
Product technology	$	20,770
Trade name	5,802
Total intangible assets			26,572
Goodwill			17,618
Other assets			705
Liabilities:
Accounts payable and accrued liabilities	$	332
Deferred revenue	70
Deferred tax liability	6,466
Total liabilities			6,868
Net assets acquired			$	39,434

The goodwill recognized in connection with this acquisition is attributable to synergies that are expected to enhance and expand the Company’s overall product portfolio and opportunities in new and existing markets, future products that have yet to be determined and Kumovis’s assembled workforce. This goodwill will not be deductible for tax purposes.

On April 1, 2022, we completed the acquisition of 100% of Titan Additive LLC (“Titan”) for an all-cash purchase price of $39,040. Titan, which is part of the Industrial Solutions segment and reporting unit, is a pellet-based extrusion platform that addresses customer applications requiring large build volumes, superior performance, and improved productivity at significantly lower cost. We believe the acquisition of Titan will open up new markets in the Industrial Solutions segment.

We accounted for the acquisition of Titan using the acquisition method, as prescribed by ASC 805, and we have completed the allocation of the purchase price. Shown below is the final purchase price allocation, summarizing the fair values of the assets acquired and liabilities assumed, as determined at the date of acquisition in accordance with valuation methodologies described in ASC 820:


(in thousands)
Current assets			$	661
Intangible assets:
Product technology	$	15,940
Trade name	5,580
Total intangible assets			21,520
Goodwill			17,430
Other assets			68
Liabilities:
Accounts payable and accrued liabilities	$	229
Deferred revenue	410
Total liabilities			639
Net assets acquired			$	39,040

The goodwill recognized in connection with this acquisition is attributable to synergies that are expected to enhance and expand the Company’s overall product portfolio and opportunities in new and existing markets, future products that have yet to be determined and Titan’s assembled workforce. This goodwill is deductible for tax purposes.

As of December 31, 2018, the Company owned approximately 70% of the capital and voting rights of Easyway, a service bureau and distributor of 3D printing and scanning products in China. The remaining 30% of the capital and voting rights of Easyway were acquired on January 21, 2019 for $13,500, which has been paid in installments. The Company made the final installment payment of $2,300 related to the acquisition of the remaining 30% interest in Easyway during the three months ended March 31, 2022.