3D Systems
3D Systems has announced that it has delivered a signer merger agreement to Stratasys, substantially in the form shared with the Stratasys Board on September 6, 2023. The agreement will now be filed on Form 8-K with the SEC by 3D Systems. The company also filed a presentation with the SEC 'articulating the value' in a Stratasys/3D Systems combination compared to a Stratasys/Desktop Metal combination.
3D Systems says the binding offer presents Stratasys shareholders with a ‘certain, superior alternative’ to the planned merger with Desktop Metal, and can be countersigned by Stratasys following termination of the agreement with DM. 3D Systems says it is urging Stratasys shareholders to vote no on the Desktop Metal transaction, which it describes as ‘value destroying’, at the Extraordinary General Meeting of Shareholders (EGM) on September 28, 2023.
The company believes a vote against the Desktop Metal merger will ‘send a clear message’ to the Stratasys Board of Directors to accept 3D Systems’ offer. The company says its merger agreement offers Stratasys shareholders the ability to enter into a transaction that creates unparalleled scale, significant cost synergies to enhance financial performance, and opportunities to invest in long-term growth.
3D Systems’ binding offer expires on October 5, 2023, giving the Stratasys Board five business days following the conclusion of the EGM to accept.
President and CEO of 3D Systems Dr. Jeffrey Graves said: “Stratasys shareholders are incredibly sceptical of the recent decisions made by Stratasys’ management team and Board, and remain deeply concerned about a potential acquisition of Desktop Metal. In fact, since Stratasys’ rejection of our latest proposal earlier this week, we have heard directly from a significant number of Stratasys shareholders who have urged us to provide them with an alternative.
“We are now making a binding offer that we believe is worth more than $27 per share to Stratasys shareholders, inclusive of cost synergies. We note that Stratasys’ current share price is approaching a 10-year low, trading down close to $12 after their rejection of our proposal, which we believe is starting to reflect the markets valuation of the Desktop Metal combination.”
3D Systems says it believes Stratasys’ reasons for rejecting its proposal and its ‘refusal to continue negotiations’ were either well-known to Stratasys and investors when Stratasys determined that 3D Systems’ July 13 proposal was likely to lead to a ‘superior proposal’, or ‘misleading, self-interested and overly focused on short-term prospects’.
3D Systems says the long-term trajectories of Stratasys and 3D Systems remain ‘fundamentally unchanged’ in the past two months, which it says raises serious questions to the credibility of Stratasys’ evaluation of the 3D Systems proposal. 3D Systems also claims that Stratasys affirmed that its offer would generate ‘significantly more synergies, and therefore value creation’ than any other available alternative.
Dr. Graves added: “It became apparent in our discussions with Stratasys that we were facing an entrenched Board that was only interested in the appearance of engagement to appease shareholders amidst a heated proxy contest, and cared little about delivering true shareholder value. There is no question of the value of our proposal, as Stratasys, even in its attempts to to paint our offer negatively, affirmed $74 to $88 million in cost synergies, which creates significantly more value for Stratasys shareholders than the Desktop Metal transaction.”
In its rejection of the September 6 proposal from 3D Systems, Stratasys reiterated its commitment to supporting the Desktop Metal merger as its preferred alternative. 3D Systems said in its announcement of the delivery of the signed agreement that it believes, along with a ‘significant portion’ of Stratasys’ own shareholders, that the Desktop Metal transaction is based on a ‘speculative valuation’, a ‘highly unlikely’ long-term financial forecast and ‘inferior technology’.
3D Systems says this is coupled with Desktop Metal’s history of ‘value destruction’, through ‘poorly timed’ acquisitions with ‘no track record’ of integrating those acquisitions.
Dr. Graves concluded: “Put simply, we do not believe that the Desktop Metal transaction will drive the unprecedented growth Stratasys states it will. Ahead of their upcoming vote, Stratasys shareholders have a choice to make: either vote for a Stratasys and Desktop Metal combination and endure a prolonged path of value destruction, or VOTE NO on the Desktop Metal transaction to encourage real tangible change.
“We await the opportunity to execute on our proposed transaction in order to redefine leadership in the additive manufacturing industry, capture immediate financial opportunity, position both of our businesses for long-term success and above all else, maximise shareholder value for both 3D Systems and Stratasys shareholders.”
Read more:
A complete timeline of the Stratasys + Nano Dimension + Desktop Metal + 3D Systems story (so far)
Stratasys terminates talks with 3D Systems after revised proposal worth $27 per share
Desktop Metal shareholders to vote on Stratasys merger with stockholder meeting scheduled for Sep 28
Stratasys shareholders to vote on Desktop Metal merger at upcoming meeting
Stratasys to enter discussions with 3D Systems despite Desktop Metal merger agreement
