One other chapter within the Stratasys-Nano Dimension saga is unfolding because the electronics 3D printing firm introduced a proper supply to amass Stratasys for $18 per share. At this time Stratasys is buying and selling at about $14 per share so this could signify a few 22% margin. And a 36% premium in comparison with the March 1st closing inventory value.
All that is taking place as Nano Dimension CEO is preventing an inside hostile takeover try from Canadian agency Murchinson (you may study extra about that within the video that was launched yesterday) and whereas the corporate sits on about $1.5 billion in money that was accrued as its inventory rose to over $10 per share (it’s now right down to about $3 per share, after going as little as $2 per share). Stratasys inventory, then again, is buying and selling at a 15-year low, after hitting as excessive as $140 in its 2013 peak, at the same time as the corporate now data rising revenues.
Deciding spend that money has been a problem for Nano Dimension’s senior administration, led by CEO Yoav Stern. The corporate made comparatively minor acquisitions each within the 3D printing and electronics sectors however has up to now been unable to make strategic investments with the majority of the money. As Mr. Stern say in yesterday’s video, he has not spent the corporate’s money assets whereas on the lookout for strategic investments. Nonetheless, whereas the corporate is rising considerably by way of revenues, it’s also registering heavy losses because it builds its worldwide construction. This places stress on Mr. Stern to make extra acquisitions and Stratasys might current an excellent resolution. The truth is, Nano Dimension already acquired a 12.2% stake in Stratasys final yr.
Stratasys senior administration might or might not agree. When Nano Dimension acquired the 12.2% stake and hinted that it could enhance its funding, the Stratasys board voted to implement a Rights Plan to guard its shareholders. This was designed to scale back the chance that any entity, particular person or group would acquire management of, or vital affect over, Stratasys by means of the open-market accumulation of the Firm’s shares with out appropriately compensating all Stratasys shareholders for management.
The formal supply from Nano Dimension might bypass the Rights Plan by avoiding the open market and by offering sufficient compensation. Nano Dimension reported that it has had communications with Stratasys and can proceed to work towards a mutually acceptable definitive settlement. Stratasys generated about $650 million in income within the full fiscal yr that simply ended. The query is: will almost $1.5 billion be thought of an sufficient value?
Yoav Stern, Chairman and Chief Govt Officer of Nano Dimension, shared, “We’ve got nice respect for Stratasys’ enterprise, together with Chief Govt Officer, Dr. Yoav Zeif, who we imagine is the architect of Stratasys’ latest optimistic momentum. Collectively, Nano Dimension and Stratasys can supply an more and more thrilling set of options for purchasers whereas changing into higher positioned to compete within the AME and AM industries. We imagine that is an distinctive alternative for all stakeholders – shareholders, prospects, administration, staff, and enterprise companions – of each firms. In recent times the AM market has grown in dimension and accelerated exceptional technological development, and it’s on the cusp of its subsequent part of improvement and development. Bringing Stratasys and Nano Dimension collectively is about positioning each firms to succeed as a mixed firm and lead the business into that subsequent part. With Nano Dimension’s robust tradition of innovation and observe document of profitable merger integration, we count on to unlock vital worth for all stakeholders. We look ahead to persevering with our discussions with Stratasys to achieve a mutually acceptable transaction.”
Underneath the phrases of the proposal, Nano Dimension, which has been the biggest shareholder of Stratasys since July 2022 and at the moment owns roughly 14.5% of Stratasys’ excellent shares (13.7% on a totally diluted foundation), would purchase the remaining shares of Stratasys for complete consideration of roughly $1.1 billion in money. The supply value displays a premium of 36% to the unaffected closing buying and selling value as of March 1, 2023, and a 31% premium to the 60-day VWAP by means of March 1, 2023. The proposal delivers fast and sure worth to Stratasys’ shareholders and vastly strengthens the corporate’s potential to capitalize on alternatives and navigate the challenges of the present surroundings.
Nano Dimension believes a mix of the 2 firms will unlock superior near-, medium- and long-term development and worth creation alternatives. Stratasys is positioned as a pacesetter within the developed marketplace for premium polymer-based 3D printing programs, materials and consumables, with fused deposition modeling (FDM) and PolyJet AM machines for prototyping, whereas Nano Dimension is a pioneer within the excessive development segments of 3D printing for a number of the most difficult functions, together with electronics, microfabrication, and high-performance parts. The mixture will create an unmatched platform with an unequalled portfolio of AM for manufacturing capabilities, complemented by a brand new suite of excessive development merchandise which, when mixed, finest place the Firm for continued success.
Nano Dimension and Stratasys share a tradition of innovation in course of engineering and supplies science to create cutting-edge technological success. The mixed firm’s R&D capabilities could be ideally positioned to drive speedy innovation to satisfy buyer wants within the space of 3D printing, together with the accelerated deployment of Nano Dimension’s deep learning-based AI group, DeepCube, which is the inspiration of its cloud manufacturing platform.
Combining the 2 firms’ capabilities will enhance the chance to deepen present relationships throughout shared prospects and industries by offering extra value-added providers and options, whereas additionally presenting new buyer acquisition alternatives with an expanded and diversified platform that’s unmatched within the business. The businesses’ respective buyer relationships, future alternatives in lots of shared business verticals, and distinct go-to-market channels will facilitate the sale of a extra various vary of options.
The mixture of Nano Dimension and Stratasys will create vital synergies by streamlining the group of the 2 firms, together with bettering value construction, aligning overhead and go-to-market efforts and yielding efficiencies by combining R&D assets.
The Proposed Transaction represents a novel alternative to create vital worth for Stratasys administration and staff inside an enlarged, globally-leading specialty additive manufacturing firm, amongst different profession advantages. A key success issue for Nano Dimension thus far has been its potential to retain leaders that be a part of the Firm by means of its M&A technique within the pursuit of shareholder worth, and a key facet of Nano Dimension’s curiosity in Stratasys is its robust administration group, which it intends to retain as a part of the mixed enterprise.
Most significantly, the businesses collectively will create a enterprise mannequin with an envelope that encompasses development of each the top-line and bottom-line profitability.
The execution of a definitive merger settlement between Nano Dimension and Stratasys could be topic to due diligence and approval by every firm’s Board of Administrators and completion of the transaction could be topic to customary closing situations, together with receipt of required regulatory approvals and approval of Stratasys’ shareholders.
The complete textual content of the letter delivered to Stratasys by Nano Dimension on March 6, 2023 is included beneath.
March sixth, 2023
To: The Board of Administrators of Stratasys Ltd.
Attn: Dov Ofer, Chairman, and Yoav Zeif, Chief Govt Officer
Expensive Mr. Ofer and Mr. Zeif,
As you’re conscious, for almost a yr now, Nano Dimension Ltd. (collectively with its associates, “NANO”) has been a big shareholder of Stratasys Ltd. (“Stratasys” or the “Firm”) and is at the moment your largest shareholder with roughly 14.5% of the Firm’s widespread inventory excellent (13.7% on a totally diluted basis2). We made our funding as a result of we’ve got excessive regard and appreciation for the Firm’s achievements. We’ve got been notably impressed by the Firm’s trajectory as a polymers’ Additive Manufacturing (“AM”) pioneer creating the preeminent platform for premium polymers’ 3D printing programs, materials and consumables in addition to design and different supporting software program. The mixture of those capabilities along with strategic acquisitions has positioned the Firm as a number one producer of fused deposition modelling (FDM) & PolyJet AM machines for prototyping.
We imagine now could be the time to mix our two firms and are happy to current to you this non-binding indicative supply (the “Indicative Provide”), which outlines the principal phrases and situations underneath which NANO would suggest to enter right into a enterprise mixture with Stratasys (the “Proposed Transaction”). We’re extremely assured within the deserves of the Proposed Transaction and we strongly imagine the supply represents a lovely proposal for all stakeholders of the Firm.