TCT Magazine
Nano Dimension, the largest shareholder in Stratasys after it purchased a further 12% of shares in July 2022, has announced that it opposes and intends to vote against Stratasys’ proposed merger with Desktop Metal. Nano has also urged fellow Stratasys shareholders to join in casting votes against the transaction at the upcoming Extraordinary Meeting of Shareholders (EGM) set to be held on September 28, 2023.
Nano Dimension is the largest shareholder in Stratasys with approximately 14.1% of Stratasys’ ordinary shares.
Stratasys reiterated its intention to pursue the completion of the merger agreement with Desktop Metal on September 12, 2023, when it terminated merger talks with 3D Systems after an improved offer from the company said to be worth 27 USD per share was rejected by the Stratasys Board.
Yoav Stern, CEO of Nano Dimension said: “The opportunity to vote on Stratasys’ proposed merger with Desktop Metal is quickly approaching. We express to our fellow shareholders our deep conviction that this merger would be highly dilutive and result in significant value destruction, sacrificing profitability and financial flexibility of Stratasys for limited upside.
“We intend to vote AGAINST the proposed merger. Abstaining or not voting is not enough to show your opposition and we urge fellow Stratasys shareholders to join us in voting AGAINST the transaction.”
Read more:
A complete timeline of the Stratasys + Nano Dimension + Desktop Metal + 3D Systems story (so far)
Nano Dimension shareholders re-elect all company director nominees at 2023 AGM
Nano Dimension to “stand down” on Stratasys and withdraw special tender offer
Nano Dimension offers $1.1 billion to acquire Stratasys
TCT Explainer: The power struggle at Nano Dimension
Nano Dimension says its opposition to a merger of Stratasys with Desktop Metal is based on the following rationale:
- Desktop Metal is a cash-burning1 former special purpose acquisition company (SPAC) that has underperformed and destroyed substantial shareholder value. As of September 13, 2023, Desktop Metal has lost over $3.9 billion of value, representing almost 90% of its equity value, since becoming a public company in 2020.
- The proposed Desktop Metal merger is a defensive move by an entrenched board of directors that would be highly dilutive to Stratasys shareholders in the immediate term, leaving shareholders with just 59% ownership of the combined company. Stratasys shareholders would be giving away 41% ownership to buy a company that is consistently losing money.
- Just weeks after rejecting Nano Dimension’s offer for Stratasys, at over $25 per share, Stratasys plans to issue shares at today’s value – which is less than half of the prior Nano Dimension all cash offer which was rejected. This directly contradicts Stratasys’ claim that its stock is undervalued. By using its ordinary shares as consideration, cash-generating Stratasys would be paying a premium price to acquire underperforming Desktop Metal, sacrificing profitability and capital preservation for a costly addition to the top-line.
- With the proposed Desktop Metal merger, Stratasys shareholders are promised uncertain long-term value that relies on ambiguous theoretical synergies and the unproven Desktop Metal growth story, which are not offset by the announced cost synergies.
- Instead of pursuing this expensive, highly dilutive and speculative transaction that contemplates the issuance of new equity at today’s low valuations, the board of directors of Stratasys should reconsider a genuine exploration of the numerous offers the company has received at valuations more than double the current share price. Not doing so demonstrates a neglect of the Stratasys board fiduciary duty and severe governance malpractice.
Holders of Stratasys ordinary shares as of the close of business on August 24, 2023, are entitled to vote at the Stratasys EGM, and must have voted by 11:59 pm ET on Wednesday, September 27, 2023 for their vote to be counted.
