3D Printing Industry Shake-Up: 3D Systems Launches Billion-Dollar Bid for Stratasys Amidst Merger Battle
The additive manufacturing sector is abuzz with activity, and Stratasys, a prominent Israeli provider of polymer 3D printing solutions, finds itself at the epicenter of a high-stakes corporate drama. No sooner had the industry digested the news of Stratasys’s planned merger with Desktop Metal than a new, significant development emerged. On June 1st, 2023, Stratasys announced via an official press release that it had received an unsolicited and non-binding takeover offer from a direct and long-standing competitor: 3D Systems. This unexpected bid injects a fresh wave of competition into an already dynamic market, setting the stage for what could become one of the most defining corporate battles in the 3D printing space.
The offer from 3D Systems proposes to acquire Stratasys for a total consideration of $7.50 in cash plus 1.2507 newly issued shares of 3D Systems common stock for each outstanding Stratasys share. Based on 3D Systems’ share price of $8.33 at the time of the announcement, the per-share value of this offer stands at approximately $17.91. With 68.40 million Stratasys shares currently outstanding, this audacious bid values the entire deal at an impressive $1.225 billion. This move highlights the strategic intent of 3D Systems to consolidate market share and expand its technological portfolio, challenging the established trajectory of Stratasys’s future.
Despite the magnitude of this new proposal, Stratasys has clarified that, for the time being, the announced stock transaction merger with Desktop Metal remains in effect. This merger, initially slated for completion in the fourth quarter of 2023, is a pivotal strategic move aimed at combining two industry leaders to create a comprehensive portfolio across polymer and metal additive manufacturing. Stratasys’s board of directors, alongside its financial and legal advisors, is now carefully reviewing the unsolicited offer from 3D Systems. This diligent review process is standard procedure for such significant corporate developments, ensuring that all options are thoroughly evaluated in the best interest of Stratasys shareholders. As of now, no definitive decision regarding 3D Systems’ offer has been made public, leaving the future direction of Stratasys in a state of suspense.
According to current information, the merger agreement between Stratasys and Desktop Metal remains unaffected by the new offer by 3D Systems and thus continues to exist (photo credits: Stratasys)
The industry is particularly stirred by this development, not least because 3D Systems and Stratasys are often regarded as the pioneers of the modern 3D printing industry. Both companies have been steady leaders, consistently innovating and shaping the market for decades. This latest offer from 3D Systems is not the only acquisition attempt Stratasys has faced recently. Just days prior, on May 30th, Stratasys publicly announced its rejection of a partial takeover offer from Nano Dimension. That specific proposal aimed to acquire between 38.8% and 40.8% of Stratasys’s outstanding common stock for $18.00 per share in cash. This $1.1 billion deal was unanimously deemed not lucrative by Stratasys’s board and financial advisors, leading to its rejection.
Nano Dimension, already holding a significant 14.2% stake in Stratasys, would have beneficially owned a total of 53% to 55% of the outstanding shares had its partial takeover bid been successful. This would have granted Nano Dimension controlling interest in Stratasys, a goal it has aggressively pursued over the past year. Comparing the financial aspects, 3D Systems’ current offer of approximately $17.91 per share (combining cash and stock value at the time of announcement) is technically marginally lower in per-share cash value than Nano Dimension’s $18.00 cash per share. However, considering the overall structure and the potential for greater synergy, the 3D Systems’ all-stock and cash offer represents a total deal value that surpasses Nano Dimension’s rejected bid by a substantial margin, equating to roughly $125 million more in total value based on the prevailing share prices. This nuance in valuation underscores the complexity of these high-stakes corporate maneuvers, where total deal value and strategic fit often outweigh a slight difference in per-share cash. The competitive bids illustrate a growing trend of consolidation, as industry giants vie for dominance in the rapidly expanding additive manufacturing landscape.
Nano Dimension: Setback or Strategic Pause?
The latest developments signal a potential setback for Nano Dimension, which has seemingly been laser-focused on acquiring Stratasys as a cornerstone of its ambitious growth strategy. Following the official announcement of the Stratasys/Desktop Metal merger, Nano Dimension CEO Yoav Stern initiated a conference call on May 30th, 2023, where he vocalized strong opinions regarding the merger. During the call, Stern revealed that Nano Dimension had considered at least 350 companies for acquisition between 2021 and 2023, with Desktop Metal being among them. Conversations with Desktop Metal reportedly began as early as November 2022, but Nano Dimension ultimately decided against pursuing the acquisition, citing an unwillingness to meet the $800 million purchase price Desktop Metal was seeking.
Stern did not mince words when discussing the Stratasys/Desktop Metal merger, classifying it as a “financial bailout” for Desktop Metal. This strong rhetoric from Nano Dimension’s CEO has effectively poured oil on the fire of public discourse, suggesting a deeply competitive and perhaps personal rivalry within the industry. Stern’s comments imply that the merger is a desperate measure rather than a strategic alignment, a claim that Stratasys and Desktop Metal would undoubtedly dispute. This narrative from Nano Dimension is likely an attempt to sway public and investor opinion, potentially undermining the proposed merger and paving the way for future attempts to acquire Stratasys.
Stratasys has so far rejected the offers it received for a partial takeover by Nano Dimension (photo credits: Nano Dimension)
With these multi-billion-dollar deals unfolding, the 3D printing industry is rapidly evolving into a complex battlefield of corporate ambitions. Stratasys, positioned squarely in the middle, has become a highly coveted asset. The motivations behind these takeovers are multifaceted, focusing on expanding technological capabilities, capturing greater market share, achieving economies of scale, and accelerating innovation. The strategic visions and shared interests that drive company takeovers are crucial in determining successful outcomes. The ultimate decision Stratasys makes—whether to proceed with Desktop Metal, accept 3D Systems’ offer, or explore other alternatives—will have profound implications for the future competitive landscape of additive manufacturing. It will be fascinating to observe how these intricate corporate maneuvers play out in the coming months, shaping the next era of 3D printing technology and market leadership. Industry watchers are anticipating further developments with keen interest, as the stakes continue to rise in this high-tech merger saga. You can find more detailed information about the offer received by Stratasys directly from their investor relations HERE.
What are your thoughts on 3D Systems’ bold move to acquire Stratasys? How do you foresee this impacting the broader 3D printing industry and the future of additive manufacturing? Share your insights and opinions in a comment below, or join the conversation on our LinkedIn, Facebook, and Twitter pages! Don’t miss out on the latest news and updates from the world of 3D printing; remember to sign up for our free weekly Newsletter here, delivered straight to your inbox! Additionally, you can explore all our engaging videos on our YouTube channel for more in-depth content.