Stratasys Blasts Nano Dimension Acquisition Offer, Open to Talks with 3D Systems

Rivaling Fujifim’s attempted takeover of Xerox, and Xerox’s attempted takeover of HP Inc., a similar contentious fight is being played out in the 3D-printer world, with 3D-printer maker Nano Dimension attempting to acquire 3D-printer leader Stratasys, as well as attempting to replace the Stratasys board of directors with Nano-friendly directors. 

Stratasys, which is headquartered in Isreal, and makes industrial, commercial, and professional 3D printers, is generally considered to be the leader in the industrial 3D-printer market. According to Investopedia, it  has a market cap of $818.8 million. It had 2022 net revenue of $651.5 million, up 7.3 percent year-over-year, but a net loss of $29.0 million.

Stratasys Rejects Nano Offer

On July 17th, Stratasys announced that its board of directors had unanimously rejected a revised second acquisition offer from Nano Dimension on July 10, 2023.

Stratasys also said that Nano’s offer for $24.00 per share in cash “is misleading, coercive, substantially undervalues the company as a whole and is NOT in the best interests of all Stratasys shareholders.”

Accordingly, the board unanimously recommended that shareholders reject the partial offer, and not sell their shares. 

Stratasys also stated that:

• Nano’s offer means Stratasys shareholders who sell their shares may have as few as approximately 40 percent of their shares purchased, assuming full participation in the offer. If the partial tender offer is successful, additional shareholders are likely to tender their shares during the mandatory four-day extension window, and shareholders may retain approximately 60 percent of their existing shares in a Nano-controlled Stratasys.
• The offer implies a value of approximately $15 to $19 per share or less, given that Stratasys being controlled by Nano is likely to lead to Stratasys shareholders’ remaining shares trading at a heavily discounted level, which could be approximately $9 to $15 per share or less.
• Stratasys also alleged that Nano has destroyed significant value and trades at negative firm value. According to Stratasys: “Yoav Stern, Nano’s CEO, cannot be trusted, has made misrepresentations about Stratasys and is not qualified to manage Stratasys. Since Yoav Stern’s appointment, Nano has spent more than $500 million in cash and increased its revenue by only $44 million.”
• If Nano’s offer is successful, Stratasys said significant conflicts of interest would exist that are likely to be detrimental to Stratasys and its minority shareholders. “Nano and Yoav Stern may not be incentivized to act in the best interest of minority shareholders of Stratasys, and Nano could block any future transaction that might maximize value for Stratasys and its minority shareholders, including Stratasys’ ability to engage in discussions with 3D Systems.”

Stratasys also advised shareholders to contact their brokers and and instruct them to deliver a Notice of Objection to Nano on their behalf, and noted that shareholders who have already tendered their shares can still withdraw them.

“Unqualified Slate of Director Candidates”

Stratasys also said that in connection with Stratasys’ 2023 Annual General Meeting of Shareholders that will be held on August 8th: “Nano has nominated an unqualified slate of director candidates as part of its campaign to acquire control of Stratasys.” The Stratasys board unanimously recommended that Stratasys shareholders vote only for the re-election of the Stratasys slate of candidates that consist of “the eight highly qualified current members of Stratasys’ board.”

Stratays warned that “Voting for Nano’s slate will enable Nano to take control of Stratasys without paying shareholders, irrespective of the partial tender offer. Once controlling the Stratasys Board, Nano could use numerous conditions to walk away from the partial tender offer.

“Nano’s slate of director candidates is unqualified and has far less relevant experience and expertise than Stratasys’ slate of directors. In addition, Nano’s slate of director candidates has presided over serious corporate governance failings and value destruction,” Stratasys said.

3D Systems’ Offer

Last month, Stratasys had also announced that it received a third unsolicited offer from 3D Systems to acquire Stratasys for $7.50 per share in cash and 1.2507 newly issued shares of 3D Systems common stock per ordinary share of Stratasys in a deal worth about $2 billion.

Also on July 17th, Stratasys announced it would engage in discussions with 3D Systems about a possible acquisition.

The company said it “intends to engage in discussions with 3D Systems with respect to 3D Systems’ July 13, 2023 revised proposal, subject to the requirements of the Desktop Metal merger agreement.”

On May 25, 2023, Stratasys had announced that it entered into a merger agreement with Desktop Metal, pursuant to which Desktop Metal agreed to combine with Stratasys in an all-stock transaction. However, 3D Systems has said that if Stratasys accepts its offer, it would pay for the termination fee for the Desktop Metal deal.

More Resources

June 2023: 3D Systems Makes Bid for Market-Leader Stratasys