Nano Dimension Ltd. last week said it has made a formal, non-binding offer to acquire Stratasys Ltd. for $18 per share in cash. The company previously said it views Stratasys as a “strategic, complementary asset in the relatively mature polymer-based AM [additive manufacturing] market segment.”
“We have great respect for Stratasys’ business, including Chief Executive Officer Dr. Yoav Zeif, who we believe is the architect of Stratasys’ recent positive momentum,” stated Yoav Stern, chairman and CEO of Nano Dimension. “Together, Nano Dimension and Stratasys can offer an increasingly exciting set of solutions for customers while becoming better positioned to compete in the AME [additively manufactured electronics] and AM industries.”
“In recent years, the AM market has grown in size and accelerated remarkable technological advancement, and it is on the cusp of its next phase of development and growth,” he said. “Bringing Stratasys and Nano Dimension together is about positioning both companies to succeed as a combined company and lead the industry into that next phase.”
Stratasys offers 3D printing value
Nano Dimension said it believes a combination with Rehovot, Israel-based Stratasys will offer the following growth and value-creation opportunities in the near, medium, and long terms:
Establish a portfolio of complementary materials, software, and systems: Stratasys is a leader in the market for premium polymer-based 3D printing systems, material, and consumables, with fused deposition modeling (FDM) and PolyJet AM machines for prototyping, noted the company.
Nano Dimension said it is a pioneer in the high-growth segments of 3D printing for some of the most challenging applications, including electronics, microfabrication, and high-performance components.
Accelerate research and development: Nano Dimension said it and Stratasys share a culture of innovation in process engineering and materials science. The combined company’s R&D capabilities would be positioned to to meet customer needs in the area of 3D printing, including the accelerated deployment of Nano Dimension’s deep learning-based AI group, DeepCube, which is the foundation of its cloud manufacturing platform.
Enhance market penetration and cross-selling Opportunities: A combination of the two companies’ capabilities and offerings could deepen existing relationships across shared customers and industries, said Nano Dimension.
A merger could also present new customer-acquisition opportunities, said the company. Nano Dimension added that its and Stratasys' customer relationships, shared industry verticals, and distinct go-to-market channels could facilitate the sale of a more diverse product range.
Generate organizational synergies: The combination of Nano Dimension and Stratasys could allow for streamlining their organization, including improving cost structure, aligning overhead and go-to-market efforts, and yielding efficiencies through combined R&D resources.
Provide value to management and employees: Nano Dimension said a key factor of its success to date has been its ability to retain leaders that join the company through its merger and acquisition strategy in the pursuit of shareholder value. The company also expressed interest in Stratasys' management team, which it intends to retain as part of the combined business.
Leader in growth and profitability: Nano Dimension asserted that the combined company will create a business model with an envelope that encompasses growth of both the top-line and bottom-line profitability.
“With Nano Dimension’s strong culture of innovation and track record of successful merger integration, we expect to unlock significant value for all stakeholders,” said Stern. “We look forward to continuing our discussions with Stratasys to reach a mutually acceptable transaction.”
Nano Dimension applies deep learning, the cloud to AM
Waltham, Mass.-based Nano Dimension said it applies deep learning to improve manufacturing capabilities, and it manages a distributed manufacturing network in the cloud. The company designs and makes multi-dimensional polymer, metal, ceramic 3D printing machines and consumable materials.
Nano Dimension claimed that its AME systems enable the design and development of high-performance electronic devices (Hi-PEDs). It boasted that it can produce multi-dimensional polymer, metal, and ceramics, from millimetres to several centimters in size, with micron precision.
The company said it offers rapid prototyping, high-mix-low-volume production, IP security, minimal environmental footprint, and design-for-manufacturing capabilities.
Nano Dimension has more than 2,000 customers across vertical target markets such as aerospace and defense, advanced automotive, high-tech industrial, specialty medical technology, R&D, and academia.
It recently installed an Adamaflex130 3D printing system for NASA Marshall Space Flight Center.
“It is hard to imagine working with an organization that is doing more groundbreaking and literally expanding the envelop of space as NASA,” Stern said. “Our team took a risk in developing a system that can print in multiple materials and have open parameter settings, and they did it successfully. We trust this system will enable the pioneering leaders at NASA to fabricate innovative applications.”
Terms of the proposed acquisition
Nano Dimension has been the largest shareholder of Stratasys since July 2022 and currently owns approximately 14.5% of Stratasys’ outstanding shares (13.7% on a fully diluted basis, assuming the company has 70.652 million fully diluted shares outstanding pursuant to its 20-F annual report filed with the Securities and Exchange Commission (SEC) on March 3 and based on a per share price of $18.
Nano Dimension proposed to acquire the remaining shares of Stratasys for total consideration of approximately $1.1 billion in cash. The offer price reflects a premium of 36% to the unaffected closing trading price as of March 1 and a 31% premium to the 60-day volume-weighted average price (VWAP) through March 1.
The execution of a definitive merger agreement would be subject to due diligence and approval by each company’s board of directors.
Completion of the transaction would be subject to customary closing conditions, including receipt of required regulatory approvals and approval of Stratasys’ shareholders.
Greenhill & Co. and Lazard Frères & Co. are acting as Nano Dimension’s financial advisors, and Sullivan & Worcester LLP is serving as legal advisor.