UPDATE: one of Nano Dimension’s major shareholders strongly opposes Stratasys takeover attempt

A few hours ago, we reported that Nano Dimension had made an official bid to acquire the world’s leading 3D printing company, Stratasys, for $1.1 billion. This is quite shocking information, considering that Nano Dimension is a relatively small company that has large financial resources only thanks to obtaining them from the NASDAQ stock exchange – in terms of revenues or the number of machines sold (which are very niche and specialized) , is simply one of many entities of this type on the market. In turn, Stratasys is currently an independent leader in the 3D printing industry, taking into account the level of revenue. The idea of someone like Nano Dimension taking it over seems frivolous and unrealistic. It turns out that many other people have similar thoughts – including one of the company’s main shareholders – Anson Funds.

In general, Nano DImension has been in turmoil for several months – major shareholders such as Anson Funds or Murchinson are very dissatisfied with the actions of the current management board of the company, chaired by Yoav Stern. In their opinion, the company does not fulfill its promises regarding the development and increase in sales of its proprietary 3D electronics nanoprinting technology, and instead “burns” funds for subsequent acquisitions of companies that do not necessarily operate in the same industries. Last year, Nano Dimension bought NanoFabrica, Global Inkjet Systems, Admatec/Formatec, Essemtec and DeepCube – and most sensationally – acquired a 12% stake in Stratasys, which resulted in the implementation of the so-called a “poison pill” to stop Nano Dimension from buying more of its stock.

Today, shortly after announcing the bid to buy all of Stratasys, Anson Funds issued a damning press release urging the company to withdraw its takeover proposal:

Our primary and immediate concern is that the Company is using the majority of its cash for the contemplated unsolicited acquisition of Stratasys. Anson does not support this transaction in light of the ongoing proxy competition. It is obvious that the Management Board is acting unilaterally against the will of the Company’s shareholders, digging in and working to prevent shareholders from voting. Not surprisingly, Nano Dimension is trying to structure this potential acquisition in such a way as to bypass the need for shareholder approval before closing the deal. Given the Company’s poor performance, we believe the best course of action is to return cash to shareholders rather than conducting large-scale mergers and acquisitions

We have repeatedly urged the Company to implement a significant return on capital program to preserve and increase shareholder value. However, management repeatedly ignored our requests and instead continued to erode its valuable working capital position. Discussions were recently discontinued after we expressed our view that the Company would best serve its shareholders by aggressively using its share buyback program and substantially increasing its efforts to return capital to shareholders. Management declined this request and informed us that “[they] control the company” and not us, the beneficial shareholders.

We believe it is this level of management arrogance that causes Nano Dimension to trade at a staggering and permanent 31% discount on cash and investment balance. It is clear to us that other market participants have also lost faith in management’s ability to create or increase shareholder value. Management’s self-interest is worrying.

Given this latest news, the bizarre nature of the takeover proposal, and the ongoing “corporate antics,” it’s pretty clear that something as bad as it is bizarre is going on in Nano Dimension. The board is facing a serious dispute with major shareholders who are officially taking steps to dismiss it, and this takeover attempt by Stratasys appears to be aimed at so-called “escape forward” and a complete change of narrative.

Although the offer made by Nano Dimension seems tempting (a 36% bonus on the closing price of the share price on March 1, 2023 and a bonus of 31% on the 60-day VWAP until March 1, 2023) , Stratasys owners can only accept it in the context of early retirement. Giving the reins of one of the most important companies in the history of the 3D printing industry to the management, which is permanently in conflict with its own shareholders, can only mean its gradual collapse.

Source: www.yahoo.com