Acquisitions, Mergers & PartnershipsAM Industry

Stratasys turns down both 3D Systems and Nano Dimension’s offers (again)

Board of Directors rejects Nano Dimension’s offer and determines latest proposal from 3D Systems is not superior to its agreement with Desktop Metal

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In the latest episode of the ongoing merger saga, Stratasys Ltd. turned down both 3D Systems and Nano Dimension‘s offers. Again. The company’s Board is convinced that the merger with Desktop Metal is the best course of action. Of course, it is also the only course of action that would enable Stratasys’ current management to retain control of the company and continue on its current path. Given the current management’s recent track record, which seems to be steering the company in a productive direction, it is also probably the safest course of action for shareholders. 3D Systems and Nano Dimension, on the other hand, seem to differ and continue to uphold the validity of their proposals.

Yesterday, after reviewing and consulting with its independent financial and legal advisors, the Stratasys Board of Directors unanimously determined that the revised unsolicited non-binding proposal that 3D Systems made on June 27, 2023 to acquire Stratasys, representing an approximate 3% increase in total value, adding 1% to the total ownership for Stratasys shareholders, is “opportunistic, continues to materially undervalue Stratasys, does not constitute a “Superior Proposal” and does not provide a basis upon which to enter into discussions with 3D Systems, pursuant to the terms of the merger agreement with Desktop Metal, Inc.

Stratasys Board of Directors rejects Nano Dimension offer and latest proposal from 3D Systems, continues with Desktop Metal merger
Stratasys’ industrial FDM range

On May 25, 2023, Stratasys entered into a merger agreement with Desktop Metal, pursuant to which Desktop Metal agreed to combine with Stratasys in an all-stock transaction. The Stratasys Board has not changed its unanimous approval, recommendation, and declaration of the advisability of the previously announced transaction with Desktop Metal.

Also yesterday, the Stratasys Board of Directors unanimously determined that the revised partial tender offer by Nano Dimension Ltd. on June 27, 2023, to acquire ordinary shares of Stratasys for $20.05 per share in cash also substantially undervalues the company and is not in the best interests of Stratasys shareholders. Accordingly, the Board unanimously recommended that shareholders reject the revised offer and deliver a Notice of Objection against the offer.

On May 30, 2023, the Stratasys Board rejected Nano’s previous partial tender offer to acquire ordinary shares of Stratasys for $18.00 per share in cash. Stratasys urges shareholders “not to tender into Nano’s partial offer [as] Tendering into Nano’s partial offer would only encourage Nano’s opportunistic and coercive attempt to acquire Stratasys at an inadequate price.”

Unlike tender offers in the United States, under Israeli rules, Nano’s tender offer will fail if the shares covered by submitted Notices of Objection are greater than or equal to the number of shares tendered in the offer. Therefore, in addition to not tendering, filing a Notice of Objection could help cause the tender to fail. Simply not tendering could result in non-tendering shareholders being left as minority shareholders in a company controlled by Nano Dimension. Therefore, the company urged shareholders to file their Notice of Objection in order to reduce the risk of becoming a minority shareholder.

Stratasys also said it has received feedback from many shareholders and brokers that “the unfair, coercive offer process constructed by Nano makes it difficult and confusing for shareholders that own Stratasys shares beneficially (as do a vast majority of Stratasys shareholders) to file a Notice of Objection.” Stratasys has informed Nano, its tender offer agents and the Israeli courts that this process must be fixed so it is equally as accessible and easy for a beneficial owner of Stratasys shares to file a Notice of Objection as it is to tender shares into Nano’s partial tender offer.

Ultimately, the Stratasys board urges shareholders not to tender their shares, to withdraw any shares that have already been tendered, and to file a Notice of Objection.

Update, July 1st, 2023

3D Systems responded to Stratasys’ refusal to discuss a business combination transaction. President and CEO Dr. Jeffrey Graves stated, “The Stratasys Board has made the perplexing decision to not engage with us to reach a mutually agreed upon, friendly transaction that we believe would unlock value for all shareholders. Frankly, we are surprised that in their quick rejection, Stratasys’ Board did not acknowledge or refute the merits of our proposed transaction, or respond to the market’s concerns about the value destruction of the Desktop Metal merger.”

Stratasys Board of Directors rejects Nano Dimension offer and latest proposal from 3D Systems, continues with Desktop Metal merger
SLA 750 3D printer from 3D Systems.

Continued Dr. Graves, “We are hearing from a spectrum of Stratasys shareholders that they understand and believe that a combination between 3D Systems and Stratasys offers an unparalleled option for certainty, scale and long-term growth. This feedback from Stratasys’ own shareholders only strengthens our conviction that this is the right deal at the right time. It is concerning that, as public company directors, the Stratasys Board is ignoring these signals from its investors. It is difficult to understand their rationale, which we think raises questions as to whether they have entrenched themselves in a position that demonstrates an absence of focus on maximizing shareholder value.”

The Company reiterated its view of the key benefits of its proposed transaction with Stratasys and said it continues to believe Stratasys is relying on assumptions that are unfounded and unreasonable in order to proceed with the proposed merger with Desktop Metal.

Dr. Graves concluded, “We have shown a willingness to negotiate with the Stratasys Board and remain flexible and open to engaging in productive discourse in pursuit of a friendly, negotiated transaction. We are committed to making this combination a reality.”

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Davide Sher

Since 2002, Davide has built up extensive experience as a technology journalist, market analyst and consultant for the additive manufacturing industry. Born in Milan, Italy, he spent 12 years in the United States, where he completed his studies at SUNY USB. As a journalist covering the tech and videogame industry for over 10 years, he began covering the AM industry in 2013, first as an international journalist and subsequently as a market analyst, focusing on the additive manufacturing industry and relative vertical markets. In 2016 he co-founded London-based VoxelMatters. Today the company publishes the leading news and insights websites VoxelMatters.com and Replicatore.it, as well as VoxelMatters Directory, the largest global directory of companies in the additive manufacturing industry.

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