In a statement from Stratasys on June 21, its Board of Directors has urged shareholders of the company to not tender shares into the tender offer from Nano Dimension, and to file a notice of objection against the offer, which it has referred to as ‘unsolicited, inadequate, and coercive’. Stratasys first made this recommendation to its shareholders when its board 'unanimously' rejected the offer on May 30, 2023.
Nano Dimension issued a statement in response later on the same day.
Stratasys’ Board says it believes that Nano’s partial offer of 18.00 USD per share, which Nano reaffirmed on June 14, ‘substantially undervalues Stratasys’ leading position’ as well as the company’s growth opportunities, which it says are larger in light of the pending merger with Desktop Metal.
Stratasys said about the tender offer: “Nano’s partial tender offer is a coercive, highly opportunistic and self-interested attempt to acquire control of Stratasys and derail the Company’s significant growth opportunities and strategic plan for value creation.”
The company has also said that Nano Dimension’s attempt to acquire the company is led by a board and management team whose legitimacy and composition ‘remains in doubt’. Stratasys adds that the legal authority of Nano to make and consummate the partial tender offer ‘remains subject to adjudication in the Israeli courts, due to the ongoing power struggle within Nano itself with Murchinson Ltd.
Stratasys said in its statement: “Nano’s management team has demonstrated a disregard for shareholder value and is ill-equipped to successfully operate a global business at the scale of Stratasys, underscored by Nano’s track record of poor leadership, governance policies and reporting standards as well as a history of value-destructive acquisitions, including DeepCube and NanoFabrica.”
In the June 21 statement, Stratasys said that there is ‘substantial risk’ that the partial tender offer will ‘never be consummated or will be significantly delayed’.
The tender offer from Nano Dimension is subject to various conditions, one being that the Stratasys Board of Directors terminates the shareholder rights plan, and another being that Nano obtains approval from the committee of Foreign Investment in the United States (CFIUS), which Stratasys says will likely take ‘several months or more’.
Stratasys’ statement included the line: “Contrary to Nano’s recent statements on the likely timing of the closing of its tender offer following June 26, and that their offer has ‘no risk’, Nano’s offer is in fact highly contingent and its timing is uncertain. Stratasys therefore believes that Nano will extend its partial tender offer on or before June 26.”
The statement also said: “Tendering into Nano’s partial tender offer of $18.00 per share would only encourage Nano’s opportunistic and coercive attempt to acquire Stratasys at an inadequate price, while NOT tendering into Nano’s partial tender offer will show support for the Stratasys Board and management team and allow Stratasys shareholders to have their vote to realize the full value of the pending transaction with Desktop Metal.
“Unlike tender offers in the U.S., under Israeli rules, Nano’s tender offer will fail if the shares covered by submitted Notices of Objection are greater than or equal to the number of shares tendered in the offer. Therefore, in addition to not tendering, filing a Notice of Objection could help cause the tender to fail.
“The Stratasys Board recognizes that Nano Dimension has constructed an unfair, coercive process that makes it difficult and confusing for shareholders that own Stratasys shares beneficially (as do a vast majority of Stratasys shareholders) to file a Notice of Objection. Stratasys has informed Nano, its tender offer agents and the Israeli courts that this process must be fixed so it is equally as accessible and easy for a beneficial owner of Stratasys shares to file a Notice of Objection as it is to tender shares into Nano’s partial tender offer.”
Stratasys also released a Q+A regarding the tender offer from Nano Dimension, which can be found here.
The full June 21 statement from Stratasys can be found here.
On June 20, Stratasys responded to a take-over attempt from 3D Systems, announced the filing of a preliminary Form F-4 with the U.S. Securities and Exchange Commission, as well as announcing the filing of certain revenue and EBITDA estimates for its proposed combination with Desktop Metal, Inc.
Hours after the statement from Stratasys on June 21, Nano Dimension issued a press release in response, detailing how its leadership team is poised to 'drive growth and operating excellence' across Stratasys and Nano. Nano says its leadership team includes 'eight former CEOs and founders', as well as leaders who have held a combined "approximately 30 positions as CEOs, Presidents, General Managers, and/or Chairmen" over the last 30 years.
The company has said that Stratasys shareholders have until 11:59pm EDT on June 26, 2023 to tender shares of Stratasys to Nano Dimension.
Nano Dimension says that its management team represents a 'deep bench' of top caliber leadership with a long track record of driving value creation through over 80 mergers and acquisitions (M&A) transactions, which it says highlights why Nano is the right partner for Stratasys.
Nano said: "Nano Dimension has the right offer, the right plan, and the right leadership to deliver value to Stratasys shareholders."
As stated in previous announcements about the 18.00 USD per-share all-cash special tender offer, including its reaffirming of the offer on June 14, Nano has said that the offer delivers to Stratasys shareholders 'near term, guaranteed cash value at a compelling premium'.
Should the offer be successful, it would increase Nano Dimension's ownership of Stratasys to between 53% and 55% of the outstanding ordinary shares of Stratasys, inclusive of the 14.1% of the company's outstanding ordinary shares that Nano currently owns.
Nano Dimension said in its statement: "Nano’s increased ownership, combined with its plans to replace the majority of Stratasys’ entrenched Board of Directors, provides a clear path to fix Stratasys, by driving improved profitability and preventing the ill-conceived and dilutive transaction with Desktop Metal Inc. that presents significant uncertainty and tremendous risk of depletion of all cash, as both Stratasys and DM continue to lose cash on a quarterly basis."
Nano also says that its 'seasoned' management team and 'strong growth strategy' will deliver long-term value to Stratasys shareholders.
Nano's statement included details of four members of its management team, stating that the team has a 'proven track record of successfully growing technology companies and driving value creation':
- Nano’s Chairman and CEO, Yoav Stern, has built and ledover 6 companies, most of them U.S. public companies, some of which he has grown from single-digit million-dollar revenue companies, to companies generating hundreds ofmillions of dollars in annual revenue through both organic and inorganic growth strategies. In addition, Mr. Stern has also generated exits for investors at a ROI ranging from 2-3 times the initial investment over 1-2 years.
- Nano’s President, Zivi Nedivi, has served as the CEO of 5 companies and founder of 2 others, including U.S. and foreign companies, public and private. As CEO of an aviation supply chain company, Mr. Nedivi oversaw revenue growth from $8 million to $300 million in a five-year period, including nine acquisitions. As COO of a medical laser company, Mr. Nedivi managed thousands of employees across five continents.
- Nano’s Chief Product Officer & Head of M&A, Hanan Gino, has served as CEO of a multimillion-dollar cybersecurity company and as the head of the commercial divisions of an $800 million electronics optical inspection business. Mr. Gino also brings prodigious experience in robotics, artificial intelligence, and automation.
- Nano’s President of Americas, Dale Baker, has led 5 companies, 3 of them public, and oversaw the growth of hundreds of millions of dollars in revenue, in addition to spending many years as a senior executive at General Electric.
According to Nano Dimension, its management team has successfully integrated six companies in 18 months, and has 'harnessed M&A synergies' to drive value and growth in revenue, gross margins, and profits in addition to organic growth initiatives.
The full statement from Nano Dimension, highlighting 'leadership strength and recording of driving value creation for shareholders' can be read here.
