Nano Dimension’s Bold $1.1 Billion Bid for Stratasys: Reshaping the Additive Manufacturing Landscape

The additive manufacturing (AM) market is experiencing rapid expansion and maturation, leading to significant consolidation across the industry. This trend was particularly evident last year, with several major companies not traditionally focused on 3D printing making strategic acquisitions. Noteworthy examples include Nikon’s acquisition of SLM Solutions and Meta’s move to acquire Luxexcel, demonstrating a growing interest in integrating 3D printing capabilities into diverse portfolios. While such consolidation is a clear industry trend, individual acquisition bids can still catch the market by surprise. A prime example of this occurred recently when Nano Dimension, a recognized leader in electronics 3D printing, announced a formal offer to acquire Stratasys, a giant in the broader AM solutions space.

This surprising development is, in fact, a continuation of events that began in July 2022. At that time, Nano Dimension strategically became a significant shareholder in Stratasys, accumulating approximately 14.5% of its outstanding shares. Recognizing the potential for a hostile takeover, the Stratasys Board of Directors acted swiftly. They implemented a limited duration shareholder rights plan, commonly known as a “poison pill.” This defensive mechanism empowers existing shareholders, excluding the acquiring party, to purchase additional shares at a substantially reduced price, thereby diluting the acquirer’s stake and making a takeover significantly more expensive and difficult. Despite this protective measure, the Stratasys board emphasized that the “poison pill” was primarily a tactic to gain time, allowing them to thoroughly evaluate options and determine the course of action best suited for the company’s long-term interests. It appears that confidential discussions between the two companies have continued since then, leading to Nano Dimension’s recent formal proposal. Nano Dimension has also clarified that its latest offer is non-binding and does not necessitate a positive response from Stratasys, presenting it more as a clear expression of its sincere and strategic interest in the polymer 3D printing pioneer.

The Core of the Offer: Nano Dimension’s Financial Proposal for Stratasys

So, what are the specifics of Nano Dimension’s bold proposition? The company has offered to acquire all of Stratasys’ remaining outstanding common shares – approximately 85.5% of the company – for a cash price of $18.00 per share. This financial commitment translates to a total acquisition value of about $1.1 billion. Nano Dimension has been keen to highlight the attractiveness of this offer to Stratasys shareholders, stressing that the proposed price “reflects a premium of 36% to the unaffected closing trading price as of March 1, 2023.” Furthermore, it represents “a 31% premium to the 60-day volume-weighted average price (VWAP) through March 1, 2023.” These figures underscore Nano Dimension’s conviction in the inherent value of Stratasys and its desire to secure a deal that would be perceived as financially beneficial to Stratasys’ shareholders, prior to any speculation driving up the stock price.

Beyond the financial terms, Nano Dimension articulates a compelling strategic rationale for the proposed merger. They firmly believe that combining the two entities would create a formidable market leader within the additive manufacturing sector. This new entity would boast an “unparalleled portfolio of materials, software, and deep learning capabilities, complemented by robust go-to-market strength in the form of established sales channels.” Nano Dimension views Stratasys as a highly strategic and complementary asset, particularly in the realm of polymer AM, which aligns well with Nano Dimension’s expertise in electronics 3D printing (AME). According to a press release from Nano Dimension, a merger holds the potential to unlock superior growth opportunities across near-, medium-, and long-term horizons. These opportunities include forging a truly market-leading portfolio that spans diverse technologies and applications, accelerating crucial research and development efforts, significantly enhancing market penetration, and generating substantial operational and financial synergies. This unification, they argue, would not only drive leading growth and profitability but also offer attractive new opportunities for both management teams and employees, positioning the combined company at the forefront of the evolving AM industry.

Navigating Internal Currents: Nano Dimension’s Shareholder Activism

Intriguingly, this aggressive acquisition bid comes at a time when Nano Dimension itself is navigating a period of internal turbulence. Murchinson Ltd., which holds approximately 5.2% of Nano Dimension’s outstanding shares, making it the largest single shareholder, has publicly expressed profound dissatisfaction with the company’s overall direction and performance. About a month prior to the Stratasys offer, Murchinson went as far as to call for a special shareholder meeting, scheduled for March 20th, a meeting that Nano Dimension itself controversially deemed “illegal and invalid.” Furthermore, Murchinson has released a detailed presentation outlining its strong belief in the need for significant change at Nano Dimension, prominently advocating for a change in leadership, specifically calling for the removal of CEO Yoav Stern. Adding weight to Murchinson’s demands, Institutional Shareholder Services Inc. (ISS), one of the world’s leading independent proxy advisory firms, recommended that Nano Dimension’s shareholders support Murchinson’s proposal, along with three other related initiatives. While there is no direct evidence to suggest that this ongoing internal power struggle directly influenced the timing or decision to make a formal offer for Stratasys, the simultaneous occurrence of this high-stakes acquisition bid and significant shareholder activism within Nano Dimension certainly adds a layer of complexity and intrigue to the entire situation.

Stratasys’s Stance and the Unanimous Rejection

In the immediate aftermath of Nano Dimension’s announcement, the question of whether the offer to acquire Stratasys would be accepted became central to industry discussions. Stratasys promptly issued a concise statement to its shareholders, confirming receipt of Nano Dimension’s unsolicited, non-binding indicative offer. The statement further advised shareholders to “take no action at this time,” emphasizing that the Stratasys Board of Directors would undertake a thorough review and evaluation of the proposal. The board’s primary objective in this assessment would be to “determine the course of action that it believes is in the best interests of the Company and Stratasys shareholders,” upholding its fiduciary duty to maximize shareholder value.

Despite the unsolicited nature of the offer, Nano Dimension’s CEO, Yoav Stern, expressed considerable respect for Stratasys’s business operations and, notably, for its Chief Executive Officer, Dr. Yoav Zeif. Stern lauded Dr. Zeif as the “architect of Stratasys’ recent positive momentum,” acknowledging the company’s strong performance. He articulated his vision for a combined entity, stating, “Together, Nano Dimension and Stratasys can offer an increasingly exciting set of solutions for customers while becoming better positioned to compete in the AME and AM industries.” This perspective underscores Nano Dimension’s belief in the synergistic potential and complementary strengths of the two companies. Nevertheless, any merger of this magnitude would be contingent upon receiving formal approval from the respective Boards of Directors of both companies, adding a critical layer of governance to the process. The industry watched with keen interest to observe the next strategic moves from both Nano Dimension and Stratasys, as this situation promised to be a defining moment in the additive manufacturing landscape.

*Update (March 22nd, 2023): The Stratasys Board of Directors has unanimously voted to reject the unsolicited proposal from Nano Dimension. Following a comprehensive review of the offer, the Stratasys Board concluded that Nano Dimension’s proposal “substantially undervalues the Company in light of its standalone prospects” and therefore was “not in the best interests of Stratasys and its shareholders.” This unequivocal rejection signals the board’s firm belief that Stratasys, under its current management and strategic plan, is capable of generating significantly greater value for its shareholders independently than through the proposed acquisition. The decision highlights Stratasys’s confidence in its existing growth trajectory, its innovation pipeline, market position, and its ability to execute its long-term strategy without the need for an immediate merger. The board’s stance suggests a robust internal plan for future development and profitability that they believe will ultimately create more value than Nano Dimension’s $1.1 billion offer. This rejection now places the ball back in Nano Dimension’s court, leaving open the question of whether they will revise their offer or pursue alternative strategies.

The rejection of Nano Dimension’s bid marks a significant development in the ongoing consolidation narrative within additive manufacturing. It underscores the strategic independence many established players, like Stratasys, aim to maintain, particularly when they see robust growth prospects on their own terms. This event could trigger various responses: Nano Dimension might sweeten its offer, explore other acquisition targets, or shift focus to its internal challenges. Conversely, Stratasys might now become a target for other strategic acquirers, or it could double down on its standalone growth initiatives, potentially signaling new product launches or expanded market strategies in the near future. This dynamic interplay between leading companies highlights the competitive intensity and the evolving landscape of an industry ripe for innovation and strategic realignments. We will certainly continue to keep a close eye on the situation, providing updates as these significant events unfold in the global 3D printing sector.

What do you think of this formal offer from Nano Dimension for Stratasys and its subsequent rejection? Is this a surprising move in the industry, or a sign of things to come? Let us know in a comment below or on our LinkedIn, Facebook, and Twitter pages! Don’t forget to sign up for our free weekly Newsletter here, the latest 3D printing news straight to your inbox! You can also find all our videos on our YouTube channel.

*Cover Photo Credits: Nano Dimension