Not a completed acquisition yet, but this unsolicited bid from 3D systems for Stratasys is sure to shake things up in the additive in healthcare space.
Website – 3D Systems
Website – Stratasys
In a recent development, 3D Systems Corporation (NYSE: DDD) has proposed an unsolicited bid to acquire Stratasys, a leader in the 3D printing industry. 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.
Considering the current price of 3D Systems shares at $8.33, the value of the offer per share stands at approximately $17.91 per share. Given Stratasys’ outstanding shares, which total 68.40 million, the complete value of the deal amounts to approximately $1.225 billion.
However, if the 3D Systems share price climbs to $10, the dynamics change significantly. The value per share would increase to roughly $20.01, pushing the total deal value to approximately $1.367 billion.
This proposal comes on the heels of another prominent 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. That offer has since been rejected, and Nano Dimension has made several more approaches. The most recent offer is for $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. With current prices, 3D Systems is offering $125 million above the Nano offer of $1.1 billion.
While the financial figures certainly are compelling, it’s crucial to remember that such acquisitions are not solely about numbers. The strategic fit between the companies, potential synergies, and the future vision for the combined entity also holds significant weight in these decisions. As such, the final decision is yet to be seen, and industry analysts eagerly await the outcome.
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.
Notwithstanding all of these developments, we should maintain focus on our North Star journey, continue our activity to support our growth targets, while we create value for everyone: employees, customers, partners and shareholders.
Our day-to-day operations are unaffected. 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 declined to comment on the news.
3D Systems takeover bid for Stratasys
Stratasys has publicly acknowledged the unsolicited proposal from, once again placing Stratasys shareholders in the spotlight of this unfolding business scenario.
Stratasys is currently in the midst of a merger with Desktop Metal, Inc. (NYSE: DM), a deal that was announced on May 25, 2023. This all-stock transaction is scheduled for completion in Q4 2023, contingent on meeting standard closing conditions, including the approval of both Stratasys and Desktop Metal shareholders, along with securing necessary governmental and regulatory approvals.
The Stratasys Board of Directors is set to review the proposal by 3D Systems in alignment with its fiduciary duties and the 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 also maintains its unanimous approval of the proposed transaction with Desktop Metal.
The board advises Stratasys shareholders that there is no immediate need for action in response to the proposal from 3D Systems.
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 volume, user confidence, applications, and material options increase, the sector as a whole becomes more attractive to the substantially bigger fish swimming in the wider manufacturing pool. 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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Featured image shows 3D Systems healthcare facility in Colorado. Photo by Michael Petch.