An unexpected plot twist – 3D Systems attempts to acquire Stratasys…

Strange and interesting things are happening at the very top of the global 3D printing industry … Last week we reported on the merger of Stratasys and Desktop Metal, and for several months we have been describing a soap opera in which the president of Nano Dimension unsuccessfully tries to take over the first of the companies. Now, however, the matter is even more complicated, as 3D Systems has joined the game – the second largest company in the industry next to Stratasys in terms of revenue. Stratasys announced that on June 1, 2023, it received “an unsolicited, non-binding indicative offer from 3D Systems Corporation to acquire the company for $7.50 per share and 1.2507 newly issued 3D Systems shares per Stratasys common share”…

On May 25, 2023, Stratasys entered into a merger agreement with Desktop Metal, Inc., under which the two companies are to combine in an all-stock transaction, creating a new company valued at an estimated $1.8 billion. The transaction, which is expected to close in the fourth quarter of 2023, is subject to customary closing conditions, including shareholder approval from Stratasys and Desktop Metal, and government and regulatory approvals. At the same time, the CEO of Stratasys, Yaov Stern, recently admitted that talks on this subject had been going on for nearly a year and the announcement of the merger was only an official confirmation of the fact that “the companies have already reached an agreement”.

Stratasys says its management will carefully review the 3D Systems proposal in line with its fiduciary duties and obligations under the Stratasys-Desktop Metal merger agreement, in consultation with independent financial and legal advisors. According to the statement, the company has not yet made any decisions regarding 3D Systems’ proposals under the Desktop Metal merger agreement, which remains in effect. Stratasys adds that the company has also not changed its unanimous approval, recommendation and declaration of advisability of the agreed transaction with Desktop Metal.

In a statement regarding the 3D Systems offering, Stratasys said its shareholders are not required to take any action on the proposal for now.

Stratasys’ sole financial advisor is JP Morgan, with Meitar Law Offices and Wachtell, Lipton, Rosen & Katz acting as legal advisors. Goldman Sachs acts as sole financial adviser to 3D Systems and Freshfields Bruckhaus Deringer, together with Herzog, Fox & Neeman in Israel, act as legal adviser.

Notwithstanding the foregoing, Stratasys rejected a total of five different bids from Nano Dimension – three cash offers and two partial bids. On May 30, 2023, announced that its board of directors, after consulting with independent financial and legal advisors, unanimously determined that Nano Dimension’s partial tender offer to purchase the company’s common stock at $18.00 per share significantly undervalues the company and is not in its best interest its shareholders.

Finally, it is worth adding that while Nano Dimension is a very small player in terms of the global 3D printing industry, 3D Systems for years has been creating two absolute leaders of the 3D printing market with Stratasys in terms of revenue generated only in this product segment (we exclude HP , GE or Nikon, for which revenues from 3D printing are a tiny part of the total). 3D Systems – historically the first company in the 3D printing industry in the world, however, it generates approx. 100 million less revenue than Stratasys. At the same time, the theoretical merger of the companies into one entity would make a real giant, whose offer would include almost all the important additive technologies used in the world (the exception is MJF – a proprietary method developed by HP).

Source: www.stratasys.com