One of the biggest mergers of the AM industry: Stratasys + Desktop Metal = A deal worth $1.8 billion

By
Martial Y.
-

The combined company would generate $1.1 billion in revenue by 2025.

On Wednesday May 24, Stratasys and Desktop Metal have announced a definitive agreement where the two companies will combine in an all-stock transaction valued at around 1.8 billion USD. This is probably one of the biggest merger of the AM industry when we know the polymer strengths of Stratasys and the industrial mass production capabilities of Desktop Metal’s brands.

Let’s recap:

Let’s remind that:

The merger follows the rejection of three bids submitted by Nano Dimension – all of over 1.1 billion in value. Nano Dimension also announced its preparedness to commence a special tender offer targeting at least 51% of remaining Stratasys shares, which it believed would not be able to be deterred by the Stratasys shareholder rights plan, or ‘poison pill’.

That said, what’s under the terms of this agreement?

Under the terms of the agreement, which has been unanimously approved by the Boards of Directors of both companies, Desktop Metal stockholders will receive 0.123 ordinary shares of Stratasys for each share of Desktop Metal Class A common stock. This represents a value of approximately $1.88 per share of Desktop Metal Class A common stock based on the closing price of a Stratasys ordinary share of $15.26 on May 23, 2023. Following the closing of the transaction, which is expected to occur in the fourth quarter of 2023, existing Stratasys shareholders will own approximately 59% of the combined company, and legacy Desktop Metal stockholders will own approximately 41% of the combined company, in each case, on a fully diluted basis.

“Today is an important day in Stratasys’ evolution,” said Dr. Yoav Zeif, CEO of Stratasys. “The combination with Desktop Metal will accelerate our growth trajectory by uniting two leaders to create a premier global provider of industrial additive manufacturing solutions. With attractive positions across complementary product offerings, including aerospace, automotive, consumer products, healthcare and dental, as well as one of the largest and most experienced R&D teams, industry-leading go-to-market infrastructure and a robust balance sheet, the combined company will be committed to delivering ongoing innovation while providing outstanding service to customers. We look forward to building on the complementary strengths of the combined business and leveraging the strong brand equity across the portfolio to deliver enhanced value to shareholders, customers and employees.”

“We believe this is a landmark moment for the additive manufacturing industry,” said Ric Fulop, Co-founder, Chairman and CEO of Desktop Metal. “The combination of these two great companies marks a turning point in driving the next phase of additive manufacturing for mass production. We are excited to complement our portfolio of production metal, sand, ceramic and dental 3D printing solutions with Stratasys’ polymer offerings. Together, we will strive to build an even more resilient offering with a diversified customer base across industries and applications in order to drive long-term sustainable growth. We look forward to combining with Stratasys to deliver profitability while driving further innovation for a larger customer base and providing expanded opportunities for our employees.”

What can we expect, manufacturing wise?

Without diving into long explanations, and given the strengths each company brings to the table, one may expect that the next phase of growth will focus on:

  • Materials – the segment that requires the most attention in the AM industry.
  • A deep dive into metals within Stratasys – So far, Stratasys is acknowledged for its polymer activities. With Desktop Metal aboard, one may expect the launch of new metal 3D printing-related products.
  • The potential to become one of the largest AM service bureaus ever – with key focus on specific vertical industries – remember our conversation with Arjun Aggarwal, Chief Product Officer, Desktop Metal –. Interestingly, for that to happen, we will surely see further acquisitions in the near future.

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