3D Systems’ makes takeover bid for Stratasys: A Comparison with Nano Dimension’s Offer

3D Systems Corporation, (NYSE: DDD), has recently made an unsolicited offer to buy Stratasys – a leader in 3D printing. The indicative proposal is a combination of cash and stock – $7.50 in cash and 1.2507 newly issued shares of common stock of 3D Systems per ordinary share of Stratasys.

The current price per 3D Systems share at $8.33 translates to approximately $17.91. Given Stratasys’ outstanding shares, which total 68.40 million, the complete value of the deal amounts to approximately $1.225 billion.

The dynamics would change if 3D Systems’ share price rose to $10. The value of each share would go up to $20.01, bringing the total deal to $1.367 billion.

This proposal follows another notable offer for Stratasys. Nano Dimension proposed an “all-cash” offer of $20.05 per share for Stratasys, putting the total deal value at $1.35 billion in early April 2023. Nano Dimension made a few more attempts after the initial offer was rejected. The latest offer is $1.1 billion or $18 per share.

When comparing the offers, at the current 3D Systems share price of $8.33, Nano Dimension’s $20.05 offer appears superior both on a per-share basis and in terms of total deal value. However, if 3D Systems’ share price escalates to $10, the total value of their offer edges past Nano Dimension’s, even though the per-share value remains slightly lower. 3D Systems offers $125 millions more than Nano Dimension, based on current prices.

While the financial figures certainly are compelling, it’s crucial to remember that such acquisitions are not solely about numbers. In addition to the financial figures, the decision-makers also consider the synergies that could be achieved, the future vision and the strategic fit of the two companies. Analysts are eagerly awaiting the outcome of the final decision.

In an all-company email Stratasys CEO Yoav Zeif writes, “I appreciate this is another development on top of the unsolicited special tender offer with Nano Dimension and our pending combination with Desktop Metal, which may create confusion. However, as a public company, we act with transparency in communicating with our stakeholders, specifically – with you, our employees.

We should continue to work towards our growth goals, and create value for all stakeholders: employees, partners, customers, and shareholders..

No changes have been made to our day-to-day operation. Now more than ever, I am counting on you to keep up the good work and continue to provide our customers with the same best-in-class 3D printing solutions that they have come to expect from us.”

3D Systems has declined to comment.

3D Systems makes bid to acquire Stratasys

Stratasys publicly acknowledged that the proposal was not solicited, placing Stratasys’ shareholders at the forefront of the unfolding business situation.

Stratasys announced a merger on May 25th, 2023. This all-stock deal is expected to be completed in Q4 of 2023. It will depend on the completion of standard closing conditions. These include approval from both Stratasys shareholders and Desktop Metal shareholders as well as governmental and regulatory approvals.

The Stratasys Board of Directors has been asked to review 3D Systems’ proposal, in line with their fiduciary obligations and ongoing merger agreement with Desktop Metal. As yet, the board hasn’t made a decision concerning the 3D Systems proposal, as its merger agreement with Desktop Metal remains unaltered. The board has also maintained its unanimous approval for the proposed transaction with Desktop Metal.

The board of Stratasys advises its shareholders that they do not need to take immediate action in response the 3D Systems proposal.

The Nano Dimension CEO has been relentlessly pursuing Stratasys, with an increasingly heated war of words, taking the phrase ‘hostile takeover’ to a new level. Earlier this week, CEO Yoav Stern called Desktop Metal a “SPAC Refugee” and termed the Stratasys acquisition of Ric Fulop’s company a “bailout” Stern has previously referred to activist investor Murchinson as “lowball bottom feeders from Toronto.”

What’s next for the 3D printing industry? The sector will become more appealing to larger fish in the manufacturing pool as the volume, user’s confidence, application and material options grow. For example, Nikkon’s takeover of SLM Solutions for $662 million was completed earlier this year. And if our annual ‘Future of 3D printing‘ article is any indication, with the recurring use of ‘consolidation’ by the experts who contributed, there should be little surprise for those paying attention.

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The image featured shows a 3D Systems healthcare center in Colorado. Michael Petch.