3D Systems has entered into separate, privately negotiated repurchase agreement with a limited number of holders of its 0% Convertible Senior Notes due 2026.
The company will repurchase approximately 135 million USD aggregate principal amount of the Notes at a 26% discount to par value. 3D Systems will pay for the debt repurchase in cash from its balance sheet, with the company expecting to clear more than a quarter of its debt.
Repurchases are expected to close on December 13, 2023 subject to the satisfaction of customary closing conditions. Following these closings, approximately 325 million USD principal amount of the Notes will remain outstanding, from an initial issued principal balance of 460 million USD. The remaining debt, 3D Systems says, will continue to be held at 0% interest and will fully mature in November 2026.
3D Systems hopes that the partial repurchase of Notes will help to improve profitability and share price.
“[The] announced repurchase of approximately $135 million of our 2026 notes at a significant discount demonstrates proactive liability management and disciplined execution in the current environment,” commented 3D Systems President and CEO Dr. Jeffrey Graves. “Opportunistically executing this transaction reduces our debt by nearly 30% and reinforces the strength of our balance sheet. Our current cash reserves remain some of the strongest in the industry and, coupled with our intense focus on cost optimization to drive sustainable profitability and enhanced cash generation, we believe 3D Systems is well positioned to deliver on the bright long-term future we see ahead.”
Earlier this year, 3D Systems made several unsuccessful attempts to merge with Stratasys, who in turn was working to merge with Desktop Metal. After four months of public and private negotiations, the three companies remained independent of each other.
