Uncertainty surrounds which of the largest names in additive manufacturing will join.
We know for a fact that Stratasys is one of the leading names in 3D printing. There are three front-runners for the company’s future merger partners: Desktop Metal, 3D Systems, and Nano Dimension.
Stratasys has long preferred Desktop Metal, a pioneer in metal 3D printing. The business has shown much less interest in discussing competing proposals so far.
On that front, though, there has been some movement. Stratasys revealed today that Nano Dimension’s offer was unanimously rejected by the company’s board.
The offer, according to the business, is “misleading, coercive, substantially undervalues the Company as a whole, and is NOT [emphasis theirs] in the best interests of all Stratasys shareholders.” A statement regarding the agreement is blunt and direct.
The company claims that nano has significantly reduced value and trades at a loss. “Yoav Stern, CEO of Nano, is untrustworthy, has lied about Stratasys, and has the necessary skills to lead Stratasys.
Nano has spent more than $500 million in cash and only seen a $44 million rise in income since Yoav Stern took over.
Meanwhile, Nano Dimension has advised Stratasys to proceed with the above shareholders’ replacement. It reads:
Significant questions concerning the procedures and lack of dedication to the interests of shareholders have been raised by the present Stratasys Board of Directors’ activities.
In addition to the obvious years of “one hand washes the other” problems, six of the eight directors have served together on the Board for an unsettlingly lengthy period of time.
They have shown flagrant disdain for the interests of shareholders as well as hostility to reform. Recent attempts to add a new independent director, around 2-3 years ago, were rebuffed.
While a new director was appointed to the Board in 2020, he was removed from it just one year later, in 2021, as a result of several self-serving corporate governance strategies designed to protect the power of the current Board and the underperforming status quo.
Today, Stratasys also declared that it would consider 3D Systems’ counteroffer. According to the firm, “Stratasys intends to engage in discussions with 3D Systems regarding 3D Systems’ revised proposal as of July 13, 2023, subject to the requirements of the Desktop Metal merger agreement.”
“We approve of the decision made by the Stratasys Board. In order to provide our collective stakeholders with the unrivaled benefits of the envisioned merged firm, we anticipate swift termination of the Desktop Metal merger agreement and countersignature of the agreement to join 3D Systems with Stratasys, according to 3D Systems CEO Jeffrey Graves.
Together, 3D Systems and Stratasys are in a good position to take advantage of the scale advantages required to dominate the additive manufacturing sector and provide sustainable, profitable development.
We reaffirm our belief in the strength of 3D Systems and Stratasys’ combined financial profile, including our potential to realize the $100 million in synergies that our two management teams mutually discovered during due diligence in September 2022.
Early in March, Nano Dimension announced an offer to purchase Stratasys for about $1.1 billion. At the time, it already controlled 14.5% of the outstanding Stratasys shares.
In May, Stratasys announced plans for a merger in which it would hold 59% of the merged company’s shares and Desktop Metal would have 41%.
At the time, Yoav Zeif, CEO of Stratasys, said, “Today is a significant day in the evolution of Stratasys.” The joining of two industry leaders to form a leading global provider of industrial additive manufacturing solutions will accelerate our growth trajectory.
The combined company will be dedicated to delivering ongoing innovation while providing exceptional service to customers.
With attractive positions across complementary product offerings, including aerospace, automotive, consumer products, healthcare, and dental, as well as one of the largest and most experienced R&D teams, industry-leading go-to-market infrastructure, and a robust balance sheet.
In June, 3D Systems entered the competition. The counter proposal was rejected by Stratasys. The Donerail Group, which owns 2.3% of Stratasys, sent a letter to the board of directors at the end of the month urging them to give the bids serious consideration.
Since January 2021, Stratasys has received at least 12 unsolicited takeover approaches from at least three different bona fide acquirers, the company stated in a regulatory filing on June 20th, according to the investment firm.
“We also think that if the Board showed a serious interest in seriously considering an acquisition, it would attract more interest. The 12 revealed unsolicited acquisition proposals’ implied acquisition premiums were all competitive, with one topping the market price at the time of the offer by more than 60%. In 11 of those 12 unasked-for takeover approaches, Stratasys declined the offer without discussion.
Shareholders at Stratasys have paid a high price for such illogical and mindless rejections.
Strategic M&As over the years have contributed to Stratasys’s own growth.
In 2012, the business merged with rival Objet, and the following year, it bought renowned desktop 3D printing company MakerBot.