Stratasys implements Rights Plan to protect shareholders
The limited duration plan could be used to limit Nano Dimension's ability to obtain control after 12.12% stake acquisition
The Stratasys Board of Directors has unanimously adopted a limited duration Shareholder Rights Plan. Although it is never mentioned directly, the move could be seen as a response to the recent acquisition of a 12.12% stake in the company by Nano Dimension and a way to protect Stratasys shareholders by limiting anyone’s ability to gain control of the company.
Stratasys is one of the long-standing leaders of the additive manufacturing industry. As it exists today, the company was formed by the merger between US-based Stratasys, founded by the inventor of FDM Scott Crump, and Israel-based Objet Technologies, founded by the group that invented PolyJet material jetting technology. Over the years Stratasys has grown both organically and through acquisitions such as those of MakerBot, GrabCAD, Origin, RPS, Xaar’s AM business and more.
Nano Dimension began its growth in 3D printing by proposing a technology (AME) to directly 3D print electronics. The company went public on the Nasdaq and, after raising significant capital, it went on a spree of acquisitions that included micro 3D printing company Nano Fabrica and ceramic 3D printing company Admatec. Nano Dimension’s stock is now trading near its lowest level however the company has accumulated a significant amount of cash after the IPO.
For the past several years, the price of Stratasys stock has been trading at very low levels, probably well below its real value, making it an appetizing target. Nano Dimension may have set its sights on gaining control of the company by acquiring a large enough stake. In fact, when Nano Dimension revealed it owned 12.12% of Stratasys, the company was not referring to a single recent transaction but an ongoing accumulation of shares.
The adoption of the Shareholder Rights Plan is intended to protect the long-term interests of Stratasys and all Stratasys shareholders and enable them to realize the full potential value of their investment in the Company. It is designed to reduce the likelihood that any entity, person or group would gain control of, or significant influence over, Stratasys through the open-market accumulation of the Company’s shares without appropriately compensating all Stratasys shareholders for control.
The Rights Plan is not intended to prevent or interfere with any action with respect to Stratasys that the Board determines to be in the best interests of the Company and its shareholders. Instead, it will position the Board to fulfill its fiduciary duties on behalf of all shareholders by ensuring that the Board has sufficient time to make informed judgments about any attempts to control or significantly influence Stratasys. The Shreholder Rights Plan will encourage anyone seeking to gain significant interest in Stratasys to negotiate directly with the Board prior to attempting to control or significantly influence the Company.
The Rights Plan is similar to those adopted by other publicly traded companies. Pursuant to the Rights Plan, Stratasys will issue one right for each ordinary share outstanding as of the close of business on August 4, 2022. While the Rights Plan is effective immediately, the rights generally would become exercisable only if an entity, person or group acquires beneficial ownership of 15% or more of Stratasys’s outstanding ordinary shares in a transaction not approved by the Company’s Board.
In that situation, each holder of a right (other than the acquiring entity, person or group) will have the right to purchase one ordinary share at a purchase price of $0.01 per share. In addition, at any time after an entity, person or group acquires 15% or more of the Company’s ordinary shares, the Company’s Board of Directors may exchange one ordinary share of the Company for each outstanding right (other than rights owned by such entity, person or group, which would have become void).
The Shareholder Rights Plan has a 364-day term, expiring on July 24, 2023.