Nano Dimension has reinforced its plan to deliver long-term value to Stratasys shareholders, including the 18.00 USD per share special tender offer, saying that it says will provide ‘certain, near-term premium and all-cash value’ to Stratasys shareholders. On May 30, the Stratasys board issued a statement on the offer, with the company's board of directors saying it ‘substantially undervalues the company and is not in the best interests of Stratasys shareholders’.
Also in the statement, Nano has demanded that the Stratasys Board of Directors call an ‘Extraordinary General Meeting’ of the company’s shareholders following the completion of the tender offer, for the purpose of removing the majority of the Stratasys board and replacing them with ‘highly qualified’ nominees proposed by Nano.
Nano Dimension says that such action is ‘vital to prevent further value destruction’ and create a path to establishing a preeminent leader in the ‘rapidly growing AM market’ that will drive long-term value.
The company says that it is offering a straightforward plan to deliver value, including delivering ‘immediate’ 18 USD per share cash value to Stratasys shareholders, and a new management team set up by Nano. It says the management will be set up to be ‘committed, motivated and compensated’ based on demonstrating efficacy in driving the performance of Stratasys. In this section of the statement, Nano also says that Stratasys will become the main business asset of Nano following a successful tender, which the company says will reverse ‘years of lagging Stratasys growth and profits’.
Nano Dimension says that the tender offer provides a premium to all relevant Stratasys historical trading levels, including a 39% premium to the unaffected 60-day VWAP (Volume-Weighted Average Price) as of March 3 2023. The company claims that its offer also provides more certainty than the pending Stratasys merger with Desktop Metal, or the proposal from 3D Systems.
According to Nano, it has approximately 1 billion USD in cash and cash equivalents on hand to complete the special tender offer, which is not subject to approval from the company’s shareholders. Nano adds that its board of directors has full authority to effect the tender offer, which it says it has received confirmation of from the Israeli courts.
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The statement from Nano Dimension included key points stated down below:
Nano believes urgent change is needed. Stratasys’ current Board of Directors is not fulfilling its fiduciary duties and not acting in its shareholders’ interests:
- Stratasys directors refused to negotiate with Nano, a well-funded and reputable peer that made multiple all-cash offers at compelling premia, disregarding Nano’s efforts to reach a mutually agreeable all-cash acquisition of all outstanding ordinary shares of Stratasys not currently owned by Nano. Those offers included:
- $18.00, $19.55, and $20.05 per share, reflecting premiums of 26%, 37% and 41% to the unaffected closing stock price as of March 3rd, 2023, submitted to Stratasys on March 22nd, 29th and April 3rd, 2023, respectively.
- Stratasys directors (several of which are ex-CEOs of the company) and management have a history of empty promises to Stratasys shareholders, including making statements every two to three years that Stratasys will become a “billion-dollar company,” only to deliver further cash burn and value destruction, as evidenced by the losses on the sale of MakerBot in September 2022. MakerBot alone cost its shareholders at least $403 million (for a startup with approximately $15.7 million revenue in the year prior to acquisition) and additional over $60 million in cash1 which was spent in order to sell/spin out a failed investment. This was originally initiated and closed by a present board member when he was the CEO of Stratasys. This is just one of many examples of the Stratasys Board’s history of value destruction.
- Stratasys directors agreed to a value-destroying transaction with Desktop Metal designed to preserve their entrenchment. Stratasys’ agreement to merge with a cash-burning de-SPAC in a transaction would destroy value and be highly dilutive to Stratasys shareholders,leaving shareholders with less than two-thirds of a company that would have an uncertain path for long-term value creation.
- Over the last few days, Stratasys’ institutional and other shareholders have already filed lawsuits against this Board about their corporate governance practices in relation to the transaction.
Nano Dimension also said in its statement: “Stratasys needs better management, operators, and first and foremost, Board oversight to optimise the business and set the company on a path to realise its potential.”
The full statement from Nano Dimension can be read here.
