Desktop Metal after the collapse of the merger with Stratasys: “We will remain an independent company. Desktop Metal is not for sale.”

Today, two votes were held during the Extraordinary General Meetings of Shareholders of Stratasys and Desktop Metal, during which the merger of both companies was decided. Stratasys shareholders opposed this, but Desktop Metal shareholders were in favor of the merger. Unfortunately, this is of little importance, because without the mutual consent of both parties, the transaction cannot take place – especially since the shareholders of the acquiring company opposed it. Stratasys has already announced a review of alternative strategies, including even selling the entire company (which will probably not happen…), but Desktop Metal decided that since the merger with Stratasys did not work out, it intends to remain an independent company.

Moments after the announcement of the results of the Stratasys shareholder vote, TCT Magazine conducted an interview with Desktop Metal CEO – Ric Fulop, about his company’s further plans in the context of this unfavorable event. The interview is available here – we publish the most interesting fragments:

What is the current plan for the future?

Ric Fulop: We will remain independent. We weren’t going to be taken over by Stratasys – that’s how the press presented it – we were doing a merger of equal entities. It wasn’t exactly 50/50, but it was 41/59 and we were going to get half the seats on the board. So we were making [a deal] where they obviously had more revenue than us, but we were making [a deal] where we felt we were going to get our fair share. We wouldn’t sell the company and just leave. We were going to keep working on it together. So this is something that people don’t understand. However, it’s okay. I think we will be very successful in building our own business. We have a great future ahead of us.

(…)

At Desktop Metal, we have $127 million in cash at the end of the second quarter and we have told the market that in the fourth quarter we will be profitable in the first quarter on an adjusted EBITDA basis. Next week we enter the fourth quarter. And we are confident that we will be able to achieve it. We are pursuing this long-term goal. We’ve been working on this for a long time. If you look back, we’ve reduced our expenses significantly, it’s almost $100 million. Our company’s growth is good and we look forward to profitable growth next year.

(…)

We are 100% independent. Our company is not for sale. Contrary to what people think, if you look at our cash position and our expenses, we’re entering our first profitable quarter with about $100 million. We don’t have to sell our company, we like our company. And we weren’t selling our company, we were merging our company and we were supposed to continue working in it. So I would say that our goal for the future is to develop Desktop Metal independently and make it the best company in mass production of additives.

We focus on achieving profitability. (…)We are definitely the leader in Binder Jetting technology with over 1,200 systems (…). Our competitors are not even close (…) or even in the same league. We have over 90% market share and we are very strong in the dental industry, we are almost five times larger than Stratasys in the dental industry. We have a very, very strong business and we are growing there.

What is Desktop Metal’s relationship with Stratasys now?

Ric Fulop: Of course, we are disappointed that the people at Stratasys have failed to maintain the support of their shareholders. But we have negotiated provisions in the contract (…) that protect our company.

There’s a reason why Stratasys wanted to make a deal with us. We have mass production capabilities and are a leader in Binder Jetting and photopolymer printing in healthcare. We focus on developing our business. They have hostile bids and they have a fiduciary duty, they are a public company and they have to consider what is best for their shareholder value. There are exclusive offers that won’t go away unless they do something.

I like the management team at Stratasys, they are good people and will likely make the right decision when choosing a dance partner for the next phase of their business.

(…)

There’s a reason why they asked us to do this, and not the other way around. They saw the advantages of this merger and we saw it too, but shareholders have a voice, (…) and unfortunately Stratasys has come a long way. They had no CEO for three years before Yoav Stern took over and he did a very good job, but they have shareholders who have been there for a very long time and when there are people offering much higher prices, they have to listen to them.

(…) shareholders own the company, not the management board. This is the reality of being a public company. I think Stratasys management owns 2-3% of the company, it really is a public company. We must therefore listen to shareholders and act in their best interests. I like this management team (…) It’s unfortunate that they didn’t get the support of their shareholders.

Source: www.tctmagazine.com