Italy's SCM Group buys US-based CNC router maker Diversified Machine Systems

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Photo by SCM Group SpA SCM Group CEO Andrea Aureli.

SCM Group SpA, an Italian maker of machinery, industrial equipment and components used for processing plastics, composites, metal and other materials, has acquired CNC router maker Diversified Machine Systems LLC in Colorado Springs, Colorado.

Financial terms of the deal were not disclosed.

SCM Group is made up of six companies including CMS SpA, a subsidiary that manufactures five-axis CNC machines and thermoforming equipment for processing plastics and other advanced materials.

Diversified Machine makes a variety of three- and five-axis CNC machines in addition to aluminium and composite 3D printers. The company, which reported sales of $30m (€26.4m) in 2017, employs 120 people.

"The addition of DMS to the CMS family of brands broadens our portfolio of capabilities and expands available technologies we can deploy within our core business of offering custom CNC machine solutions," SCM Group CEO Andrea Aureli said in a 27 Nov news release.

"By adding DMS together with those of CMS and SCM Group capabilities, we can offer our customers a wider range of solutions with expanded features and greater opportunities for creating manufacturing efficiencies and higher return on investment," he added.

DMS founder and partner Patrick Bollar will stay on as chief technology officer, where he will continue to lead innovation and product development. Tanya Williams, chief financial officer at DMS, will assume the role of CEO. Both Bollar and Williams will report directly to CMS North America CEO Matt Dietrich, based in Caledonia, Michigan.

"This whole thing was really kind of an evolution of the progression of a company just continuing to try to grow," Ed Hilligrass, executive vice president and chief sales officer, said in a 28 Nov phone interview.

"Originally, when DMS was started it was a privately held company… we wanted to try to grow a little more rapidly over the past five to seven years, so we had taken on an equity partner and that equity partner did help us grow to where we've reached a certain capacity now," he said, adding that the equity partner sold the company to SCM Global and no longer holds a stake in DMS.

Hilligrass declined to disclose the investor, though Progress Equity Partners Ltd., a private equity firm with offices near Dallas and Denver, lists DMS as one of its investments on the firm's website. The firm had been part owner of DMS since 2011.

Moving forward, Hilligrass said the next stage in the journey for DMS is to continue to grow through its strategic alliance with new owner SCM Group and to position the company for "more growth and more investment."

"[SCM Group] was looking for a company that was strong, vibrant, growing, innovative — all those things that DMS has been very good at and what's established our brand and our presence in the market," he said.

Hilligrass added: "We're excited for the potential of taking the next stage of this journey. We're in the very early stages of it, and as we move forward and try and take advantage of synergies we have across the company, we're just looking forward to and excited to see what happens for us here in the future as we grow."

SCM Group employs 4,000 globally and reported sales of €700m last year.

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