Stratasys recently received a second unsolicited offer for takeover. This one was a $1.2billion bid from 3D Systems a Rock Hill (S.C.)-based manufacturer of 3-D Printers.
The bid comes after the Israeli company Nano Dimensions made several unsolicited proposals and Stratasys offered to purchase Massachusetts-based Desktop Metal.
The 3-D printing industry, according to 3D Systems’ Chief Executive Jeffrey Graves, is at a turning point.
Graves stated in the news release about the Stratasys offering that “we see significant upsides for our shareholders and stakeholders by capturing scale benefits, enhancing investments in innovation and delivering profitable long-term growth.”
3D Systems’ offer to Stratasys consists of $7.50 cash and $1.2507 in Stratasys stock. Every Stratasys common share is exchanged for newly issued 3D Systems common shares.
Stratasys has turned down multiple takeover bids from Nano Dimension. This Israeli additive manufacturing firm is the largest shareholder of Stratasys.
3D Systems’ offer was made on 30 May, days after Stratasys made a bid of about $588M to acquire Desktop Metal – yet another 3-D printing company.
In a statement filed with the Securities and Exchange Commission (SEC), the Stratasys board said it would review 3D Systems’ proposal while considering its own offer for Desktop Metal.
Graves stated in a press release that “the combination of 3D Systems with Stratasys simply is the best outcome for shareholders of both businesses.”
“We strongly believe that now is the right time for all parties involved to realize the overwhelming logic in our two businesses joining forces,” he said.
The Nano Dimension proposal was rejected by the Stratasys Board of Directors on the same day that 3D Systems made its offer.
According to Brian Drab, an analyst for William Blair & Company who covers companies in the additive manufacturing industry, 3D Systems’ offer is roughly equivalent to the three offers made by Nano Dimension.
Drab wrote an email that “We believe 3D Systems is being opportunistic in making an offer Stratasys’ shareholders may consider the best option of three suboptimal alternatives.” “We believe 3D Systems will have to pay at least $18 per share in order to complete a deal.”
3D Systems acknowledged Nano Dimension’s offers, and said in a press release that their offer represented a 35% higher price than Stratasys’ stock on March 9th, the day before Nano Dimension’s initial offer to buy Stratasys. The closing price of Stratasys’ shares on March 9 was $14.01.
As the 3D printing industry grows, it consolidates. Technology has improved so much that 3-D printers now produce large-scale parts for production purposes, not just prototypes.
Both Stratasys & 3D Systems, over the years have acquired companies to enhance their technology and build their market position.
3D Systems reported a revenue of $538 millions in 2022. This is down 12.6% compared to the previous year. But it’s bigger and more established than Nano Dimension with revenue of only $43.6 millions.
Stratasys reported revenue of $651,5 million in 2018, up 7.3% since 2022. Stratasys is focused on becoming a leader in polymer 3-D printers. 3D Systems manufactures metal and plastic 3-D Printers.
Nano Dimension owns 14,3% of Stratasys’s shares, complicating the situation.
Plus, Stratasys recently offered Desktop Metal with a termination fee of $32.5M.
3D Systems as well as Desktop Metal announced layoffs in the first quarter of this year. 3D Systems officials announced that they would reduce headcount by 6% on their first quarter earnings call. Desktop Metal, meanwhile, had announced a 15% reduction in its employee base.