TCT Magazine
Last week, Nano Dimension announced the shock news that it had acquired just over 12% of the shares belonging to Stratasys.
It was significant for a number of reasons. Chief among them is that Stratasys is one of the oldest, and still one of the leading, additive manufacturing brands, particularly on the polymer side of the market.
Nano Dimension, meanwhile, has only been active for seven years and has spent most of that time with a focus on the printed electronics space. Over the last 18 months, it has also grown out its portfolio with acquisitions of NanoFabrica, Admatec, Formatec and Global Inkjet Systems – with its move to acquire nearly an eighth of Stratasys’ shares the latest of its strategic investments.
Below, we explain why Nano Dimension has sought to invest in Stratasys.
What has motivated Nano Dimension to acquire those shares?
Nano Dimension has acquired shares in Stratasys because of its leadership in a market that is considered 'relatively seasoned' and which Nano Dimension currently does not address. In contrast, the markets which Nano Dimension serves – printed electronics and metal 3D printing, for example – are less mature.
Hence, Nano Dimension believes it is providing value to its own shareholders directly through its own play in ‘blue ocean’ type additive manufacturing sectors with ‘accelerated growth and expansion curves’, as well as indirectly via Stratasys because of its ‘commanding presence in large, stable, more mature, mostly polymer-based AM technologies.’
How is Nano Dimension in a position to make such a move?
Though still a relatively young company, Nano Dimension has successfully listed on the Nasdaq stock exchange and is said to have a revenue run rate of approximately 40m USD per annum – up by a factor of ten from two years ago and by a factor of four from last year.
Nano Dimension also has a global footprint, with offices in Boston, USA; Cambridge, UK, Lucerne, Switzerland; Munich, Germany; as well as the Netherlands, Israel and Australia. It has more than 500 employees - with 170 of them engineers working across material science, robotics, machine learning, data science, mechatronics and software - and it serves hundreds of customers. The company also says it has approximately 1.2 billion USD in cash on its balance sheet with no debt.
How does this align with Nano Dimension’s mission?
For Nano Dimension, an investment into the polymer 3D printing space with such a renowned brand complements its activity in other aspects of the additive manufacturing industry.
Speaking to TCT, Nano Dimension Chairman and CEO Yoav Stern said: “With the help of our present resources, our vision is to transform AM and AM electronics, and adjacent industrial non-digitised sectors, into an environmentally friendly and economically efficient additive manufacturing Industry 4.0 – enabling a one production-step-conversion of digital designs into functioning mechanical and electronic devices on-demand, anytime, anywhere. We aim to build an eco-friendly and intelligent distributed secured network of 3D printers and roll-in adjacent industrial ND-led digitised manufacturing self-learning and self-improving machines.”
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Is Nano Dimension making a move to acquire control of Stratasys?
When news of Nano Dimension’s acquisition of 12.12% of Stratasys shares broke, some reports proffered the possibility that Nano Dimension was planning a takeover of Stratasys – and a potentially hostile one at that. In the press release, Stern admitted that there is potential for Nano Dimension to increase its stake further, but he played down the idea that Nano Dimension could one day pursue a majority stake.
“Not necessarily,” Stern said when asked if Nano Dimension had a desire to hold a controlling stake in Stratasys. “For now, we hope that Stratasys will deliver its promises in the near future, led by its new management, but we may increase or decrease our investment in Stratasys subject to market conditions and other economic factors.”
Will Nano Dimension extend its play in polymer 3D printing further?
In the acquisition of NanoFabrica back in 2021, Nano Dimension broadened its portfolio to include a micro 3D printing technology that is capable of processing an ABS-like material. The investment in Stratasys represented its second move within polymer 3D printing, and one that complemented the NanoFabrica takeover. But Stern doesn’t anticipate Nano Dimension’s play in the polymer side of the market growing further in the short term.
“The investment in Stratasys is the extent to which we wish to go at this point, as we are internally focused on metal, electronics and other types of applications,” he said.
What has Stratasys had to say about this development?
Initially, not much. When TCT reached out to Stratasys last week, the company declined to comment.
But then on Monday July 25, the company announced the deployment of a shareholders rights plan which sees Stratasys issue one right for each ordinary share. The rights issued would only become exercisable if an entity, group or person acquires beneficial ownership of 15% or more of Stratasys' outstanding shares in a transaction not approved by the Stratasys board. If that were to happen, each holder of a right (other than the acquiring party) will have the right to purchase one ordinary share at a purchase price of $0.01 per share. The Stratasys Board would also be able to exchange one ordinary share of the Company for each outstanding right.
The intention of this Rights Plan appears to be that a party interested in increasing its share of the company beyond 15% will have to negotiate with the Stratasys Board of Directors.
