Stratasys announced they will combine operations with Desktop Metal.
After rumors began to appear yesterday, we now have one of the biggest deals in 3D print history, with a resulting company worth something close to US$1.8B. The deal is set to close towards the end. of the year.
This is an interesting development, coming close on the heels of Nano Dimension’s repeated bids to acquire Stratasys. Not one of its proposals was welcomed by Stratasys management, and it seems that Nano Dimension has insufficient cash to make further enhancements to its proposal. Evidently talks with Desktop Metal were underway even as Nano Dimension peppered Stratasys with unwanted proposals.
The resulting company would be about 3X the size of Nano Dimension and will be in first place on our weekly 3D print company leaderboard upon closing.
The terms of the deal are stock-only. In other words, each holder of Desktop Metal stock will receive Stratasys stock at the rate of 0.123 SSYS for 1.0 DM. In other words, the resulting company will be Stratasys. No cash is changing hands, making it a relatively straightforward move. Stratasys explained:
“Following the closing of the transaction, which is expected to occur in the fourth quarter of 2023, existing Stratasys shareholders will own approximately 59% of the combined company, and legacy Desktop Metal stockholders will own approximately 41% of the combined company, in each case, on a fully diluted basis.”After closing, existing Stratasys CEO Yoav Zeif will continue in that role, while Destkop Metal’s founder and CEO, Ric Fulop, will become chair of a newly designed board of directors.
Important Acquisitions by Desktop Metal and Stratasys
It’s hard to grasp how important this acquisition will be, since each of the two companies is an agglomeration of other companies that were previously scooped up.
Consider the following recent Desktop Metal acquisitions:
And then consider Stratasys acquisitions, beginning with its merger with Objet years ago:
Stratasys is no stranger to the acquisition game, having collected countless other companies over many years. Several years ago, we prepared an analysis of the acquisitions of Stratasys and 3D Systems, and it was quite a long list.
As you can now see, the combined company will be a true industry giant with so many unique 3D printing processes under its umbrella I can’t even count them. Stratasys said there would be some 3400 patents in the combined entity’s portfolio. It would have to be portrayed on a chart, and perhaps we’ll make one in the coming weeks.
Stratasys’ Early Investment in Desktop Metal
Is this a surprise? Yes and no. It might not be well known, but Stratasys was one of the original investors in Desktop Metal years ago when they sought a way to get into the 3D printed metal game. At that time, Desktop Metal was producing only the Studio metal 3D printer, so it made sense. Stratasys also went so far as to allow its captive reseller network the ability to sell Desktop Metal products, as they had been clamoring for a metal option.
Implications and Integration Work for Stratasys
There will be plenty of implications after closing. One of them will be a heck of a lot of integration work for Stratasys.