3D Systems Enters the Hunt for Stratasys
Previously targeted for a hostile takeover by Nano Dimension, Stratasys now faces unsolicited offers from 3D Systems as well
June 23, 2023
The Stratasys merger and acquisition (M&A) saga continues as a new player enters the game: 3D Systems.
In March, Additive Manufacturing (AM) systems maker Nano Dimension began making unsolicited offers to buy out Stratasys. But Stratasys rejected the overtures, choosing instead to enter into an agreement to merge with Desktop Metal. The merger between Stratasys and Desktop Metal has been blessed by the boards of both companies, stated Stratasys.
Additive manufacturing industry watcher Terry Wohlers, head of advisory services and market intelligence, Wohlers Associates, expected the deal would give Stratasys hundreds of additional metal- and dental-related patents. “As a result, it will bring the company’s intellectual property portfolio to a total of 3,400 granted and pending patents,” he says. “The merger will result in the largest AM company in the world.”
That also made Stratasys even more attractive as an M&A target, it seems.
In May, 3D Systems, a donimant player in AM, sent Stratasys a proposal to combine their businesses. The transaction would turn “each Stratasys share into $7.50 in cash and 1.2507 newly issued shares of 3D Systems common stock. The combination would create an additive manufacturing industry leader, with Stratasys shareholders owning 40% of the combined company and receiving approximately $540 million in cash,” according to the submitted proposal. “The proposal represents value creation to Stratasys shareholders worth $1.8 billion and represents a value of approximately $25 per Stratasys share, or a 70% value uplift,” the bidder pointed out.
But Stratasys rejected the offer, like it did the previous offers from Nano Dimension. The company's board of directors said the arrangement “does not constitute a 'Superior Proposal' ... pursuant to the terms of the merger agreement with Desktop Metal,” in its official response.
3D Systems is not quite ready walk away yet. This week, the bidder announced its “commitment to pursuing combination with Stratasys.”
3D Systems's President and CEO Dr. Jeffrey Graves said, “We are disappointed that the Stratasys Board has taken this step, particularly in light of the tremendous value of our proposed transaction, the broader skepticism of the merits of a Stratasys and Desktop Metal combination expressed by the market, and the overwhelmingly positive reaction to our proposal. We remain undeterred in our belief that a transaction between 3D Systems and Stratasys on the terms proposed constitutes a ‘Superior Proposal.’”
Nano Dimension already owns 14.5% of Stratasys. After being rejected, the company began offering a $18.00 per share special tender to other Stratasys shareholders. So, while keeping the new bidder 3D Systems at bay, Stratasys is also warning its shareholders not to accept “Nano’s Opportunistic Offer of Questionable Authority.”
With two bidders going after Stratasys, the M&A saga is set to continue.