Desktop Metal is to acquire fellow binder jet 3D printing firm ExOne in a deal worth $575 million subject to approval of ExOne shareholders and satisfaction of customary closing conditions.
The transaction has been unanimously approved by the ExOne Board of Directors and is expected to close in the fourth quarter of 2021. Under the terms of the agreement, ExOne stockholders will receive $192 million in cash consideration and $383 million in share consideration. For each share of ExOne, shareholders will therefore receive $8.50 in cash and $17.00 in shares of Desktop Metal common stock.
After the takeovers of EnvisionTEC, Adaptive3D and Aerosint, it represents yet another expansion of Desktop Metal’s offering as it looks to accelerate its ‘additive manufacturing 2.0’ vision. The buying company believes the integration of ExOne and its metal and sand binder jet 3D printing offering will create a ‘comprehensive portfolio’ that combines throughput, flexibility and materials breadth. It also brings together ExOne’s direct sales team with Desktop Metal’s 200-strong distribution network of partners that will ‘enable broader access to additive manufacturing solutions for businesses of all sizes.’
“We are thrilled to bring ExOne into the DM family to create the leading additive manufacturing portfolio for mass production,” commented Desktop Metal founder and CEO Ric Fulop. “We believe this acquisition will provide customers with more choice as we leverage our complementary technologies and go-to-market efforts to drive continued growth. This transaction is a big step in delivering on our vision of acceleration the adoption of additive manufacturing 2.0.”
The agreement for Desktop Metal to acquire ExOne was announced on Wednesday 11th August 2021, shortly after the New York Stock Exchange closed for the day. Soon after, ExOne CEO John Hartner distributed an email to all current ExOne customers and collaborators to outline why the deal was ‘in the best interest of ExOne, its shareholders, employees and customers.’
Acknowledging the news may stir excitement in some quarters and disruption in others, Hartner suggested that the combination of both parties’ resources would accelerate binder jetting technology. He said ExOne’s ‘clear material leadership’ - thanks to its patented Triple ACT system and the endeavour of its R&D and engineering teams - would be even more beneficial to customers when combined with the speeds of Desktop Metal’s Single Pass system. The ExOne CEO also suggested the companies’ sand 3D printing technologies were highly complementary, and the acquisition gives them an ‘unparalleled portfolio to convert the metal casting marketplace to a better way of doing business.’
“We are excited to join forces with Desktop Metal to deliver a more sustainable future through our shared vision of additive manufacturing at high production volumes,” Hartner commented in the press release. “We believe our complementary platforms will better serve customers, accelerate adoption of green technologies and drive increased shareholder value. Most importantly, our technologies will help drive important innovations at meaningful production volumes that can improve the world.”
ExOne is considered to be one of the leading additive manufacturing companies, having pioneered the commercialisation of the binder jetting process more than 15 years ago. It has brought to market metal and sand binder jet 3D printing systems, developed a broad portfolio of materials and binders, and landed the business of Altair, BMW Group, Daimler, Ford and more. In recent times, its competition in the binder jet sector grew with the likes of Digital Metal, HP and Desktop Metal launching their own solutions. ExOne has always welcomed such competition, suggesting it would help spread the message around a technology the company believes to be the ‘true future of production metal printing.’ And, having dubbed 2021 the ‘year of binder jet’ on a TCT Magazine front cover earlier this year, ExOne has decided the best way to action that future is in combination with one of its biggest competitors.
“Today is a game-changing moment for the additive manufacturing community,” added Kent Rockwell, Chairman of ExOne. “I see incredibly opportunity for our customers in working with Desktop Metal and look forward to supporting this new and combined business.”
Further transaction details
The $575m deal will close later this year, subject to approval of ExOne shareholders, the satisfaction of customary closing conditions and subject to a collar mechanism on the share consideration component described below.
The share consideration component is subject to an exchange ratio adjustment if Desktop Metal’s 20-day volume weighted average price (VWAP) 3 days prior to closing is between $7.94 and $9.70. If the 20-day VWAP exceeds the higher end of that range, the exchange ratio will be fixed at 1.7522 per share, and if the 20-day VWAP goes below the lower end of that range, the exchange ratio will be fixed at 2.1416 per share. The final number of Desktop Metal shares estimated to be issued on a fully diluted basis will range between approximately 39.5 million and 48.3 million shares at closing. Upon closing of the transaction, current Desktop Metal shareholders will own between 85 and 88% and current ExOne shareholders are expected to own between 12 and 15% of the combined company, respectively.
Kent Rockwell, ExOne’s Chairman of the Board of Directors and largest shareholder, has entered into a Support Agreement in which he will vote his 4.2 million shares in favour of the transaction.
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