Nano Dimension to acquire outstanding shares of Desktop Metal; Deal could be worth as little as $135m

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Nano Dimension is to acquire all outstanding shares of Desktop Metal for between 135-183 million USD, subject to the approval of Desktop Metal stockholders, regulatory approvals and certain termination rights. 

Per the agreement, Nano Dimension will acquire each Desktop Metal share for 5.50 USD per share, subject to possible downward adjustments to 4.07 USD per share. 

At $5.50 per share, the transaction represents a 27.3% premium to Desktop Metal’s closing price and a 20.5% premium to the 30-day VWAP as of July 2, 2024, for total consideration of approximately $183 million.

Yoav Stern, Nano Dimension’s Chief Executive Officer and member of the Board of Directors, said: “Our combination with Desktop Metal is another step in Nano Dimension’s evolution to become the leader in digital manufacturing, with capabilities in mass manufacturing for critical industrial applications. We’re excited to join forces with an excellent group of technology leaders, all of whom share our vision for transforming manufacturing to Digital Industry 4.0. I look forward to working with Ric Fulop and his team to drive value for all our stakeholders, including creating opportunities for our employees as part of a larger, more diversified global innovative company, driving customer support and generating long-term growing value for shareholders as we focus on profitable growth.”

Ric Fulop, Desktop Metal’s Co-Founder and Chief Executive Officer, added: “We’re excited to bring together our pioneering, complementary product portfolios that will further enhance our ability to serve our customers in high-growth industries with a more complete offering of digital manufacturing technologies for metal, electronics, casting, polymer, micro-polymer and ceramics applications. We look forward to working with Nano Dimension to join two great companies and their devoted teams that can serve our stakeholders to the maximum extent possible.”

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In a joint statement, Nano Dimension and Desktop Metal have suggested the merger combines two complementary product portfolios, creating the 'broadest product portfolio across metal, electronics, casting, polymer, micro-polymer and ceramics.' They also say the business combination will create a company covering 'the full gamut of customer needs' from prototyping to production across a range of critical and high-performance medical and electronics applications. By coming together, Nano and Desktop also see opportunity to cross-sell to existing customers, while growing its overall customer base with 'optimised customer acquisition capabilities and joint go-to market strategies.' The combined company will serve Amazon, Caterpillar, Fraunhofer Institute, NASA, Raytheon, REHAU, Tesla, Thermo Fisher Scientific, Toyota, the US Army and more, with the companies claiming a combined installed machine base of 8,000 systems before any new customer acquisition. 

Finally, the two companies say they will benefit from 'significantly enhanced scale' and a 'diversified profile with 2023 combined revenue of 246 million USD', of which 28% was generated by recurring revenue streams from the services and consumables. As one, the companies also believe they will have a 'strong financial profile and cash reserves,' supporting a 'part to profitability.' 

A statement read: "The combination will enable pooling of resources in administration, sales, marketing and R&D and generate efficiencies and cost savings opportunities, while enhancing R&D and innovation capabilities. The combination is anticipated to generate in excess of 30 million USD in run-rate synergies over the next few years, in addition to previously announced cost savings from each of the two organisations. We believe business operations and capabilities will provide for consolidation opportunities as the combined company focuses on core geographies, including offices, R&D and manufacturing facilities in the multiple U.S. locations, UK, Germany, Switzerland Netherland, Italy, Israel and APAC."

Subject to the terms and conditions of the merger agreement, the purchase price of Desktop Metal shares may be adjusted for:

  • Transaction expenses: Desktop Metal estimates that transaction expenses will be approximately 11 million USD, which would result in an approximate decrease of 0.44 USD per share. The maximum reduction, based on expenses, is 0.63 USD per share.
  • If the closing of the transaction extends into 2025, Nano Dimension has committed to providing Desktop Metal with a 20 million USD secured loan facility. Desktop Metal does not expect to draw on the facility, but to the extent it does, there will be an adjustment to the purchase price based on the amount drawn prior to closing of up to 0.80 USD per share.
  • If all reductions will occur, the price will be 4.07 USD per share, a total consideration of 135 million USD. 

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