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.
According to the current price per 3D Systems share of $8.33, this offer is worth 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 significantly if 3D Systems’ share price rose to $10. The price per share would rise to about $20.01 and the deal’s total value would be approximately $1.367 Billion.
This proposal follows a prominent offer made 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 several attempts to make a counter-offer. This offer was rejected and Nano Dimension is now making a new one. 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. These decisions are also heavily influenced by the strategic fit, synergies and future vision of the combined entity. 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, customers partners, 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 refused to comment on this news.
3D Systems bids to buy Stratasys
Stratasys acknowledged publicly the unsolicited offer from, putting Stratasys investors in the spotlight once again.
Stratasys announced a merger on May 25th, 2023. This all stock transaction is due to close in Q4 2023. However, it will be contingent upon meeting the standard closing conditions.
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 maintains that it has unanimously approved the proposed transaction between Desktop Metal and 3D Systems.
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? As the industry grows in volume, user comfort, applications and material choices, it becomes more appealing to those who are able to invest in larger manufacturing pools. 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 featured image is a 3D Systems facility in Colorado. Michael Petch.