3D Systems has provided an update to its shareholders regarding its proposal to combine with Stratasys in a cash and stock merger that would convert each Stratasys share into 7.50 USD in cash and 1.2507 newly issued shares of 3D Systems common stock. The offer was submitted on May 30 according to 3D Systems, with Stratasys confirming receipt of what it referred to as an ‘unsolicited’ proposal on June 2.
The combination would result in Stratasys shareholders owning approximately 40% of the combined company and receiving around 540 million USD in cash according to 3D Systems.
3D Systems President and CEO Dr. Jeffrey Graves said: “Following the overwhelmingly positive market reaction to our proposal and the positive outreach we have received from numerous shareholders, we felt it was important to provide a public update to our shareholders, given that Stratasys has not engaged with 3D Systems since we sent our proposal 21 days ago, or commented publicly other than confirming receipt of our proposal.”
In Stratasys’ press release on the offer at the beginning of June, it said that its board of directors would carefully review the proposal, in accordance with its fiduciary duties, and its obligations under Stratasys’ merger agreement with Desktop Metal, in consultation with its independent financial and legal advisors.
Dr. Graves added: “We remain steadfast that the combination of our two companies offers our collective shareholders the most compelling immediate value, long-term upside, and certainty to close. The additive manufacturing industry is at a pivotal moment, and we believe that now is the right time to pursue this combination in order to leverage the advantages of scale that our combined company would deliver.
“We are confident that our proposal is superior to Stratasys’s existing transaction, and as such, we would expect the Stratasys Board to engage promptly with us to reach agreement on a transaction for the benefit of shareholders of both companies. We are committed to bringing this combination to fruition as quickly as possible.”
Nano Dimension has also attempted to acquire Stratasys in 2023, with multiple bids being rejected. Nano issued a statement reaffirming its latest attempt, an all-cash tender offer, on June 13 and described the Stratasys merger with Desktop Metal 'value destroying'.
Read more:
Stratasys and Desktop Metal to merge in deal worth $1.8 billion
Interview: Stratasys CEO Yoav Zeif details the strategy behind Desktop Metal merger
3D Systems makes Stratasys takeover attempt
3D Systems says that on June 2, 2023, the day its offer to acquire Stratasys was disclosed to the public, Stratasys shares rose by 11.26%, and its own shares rose by 11.40%, which according to the company represents a strong market reaction to its proposal, and drove an additional value increase for both companies’ shareholders.
Similarly to its announcement on the submission of the offer, 3D Systems highlighted ‘key benefits’ of what a 3D Systems/Stratasys combination would include:
· Highly Certain, Significant Value Creationo As of market close on Friday, June 16, proposal represents a value of $19.31 per Stratasys share, a ~30% premium to Stratasys’ closing share price on May 24, 2023, the last trading day before the announcement of the proposed Stratasys-Desktop Metal transaction.
o Reaffirms clearly identified cost synergies of at least $100 million from SG&A savings, R&D integration and COGS optimization, primarily realized in the first twelve months post-close.
· No Financing Contingency
o Cash consideration funded by cash already available on the pro forma balance sheet.
o No new debt or additional equity issuance required or contemplated at this stage.
· High Confidence in Regulatory Clearance
o Complementary platforms present minimal direct product overlap while creating significant synergies in R&D spend optimization.
o No CFIUS or ITAR closing conditions required.
o 3D Systems is confident that all applicable regulatory clearances of the proposed combination will be obtained.
· Transactional Speed and Certainty
o Entrance into a definitive merger agreement without delay and on terms that provide Stratasys shareholders with at least as much deal certainty as the existing all-stock merger agreement with Desktop Metal.
Goldman Sachs & Co. LLC is acting as exclusive financial advisor to 3D Systems, and Freshfields Bruckhaus Deringer (US) LLP, together with Herzog, Fox & Neeman in Israel, is acting as legal counsel to the company.
Stratasys responded to the 3D Systems takeover attempt on June 20.
