It appears that Stratasys may have pulled the plug on the proposed merger with 3D Systems.
This has been an ongoing saga for months now, starting after Stratasys announced a merger with Desktop Metal. Shortly thereafter, unsolicited takeover bids from Nano Dimension appeared, which for some unexplainable reason wanted to take over the much larger Stratasys.
Repeated bids from Nano Dimension were consistently rejected by Stratasys, but in the process the company’s value was highlighted. Then, 3D Systems stepped into the fray with bids of their own.
Stratasys also rejected those bids, until the most recent bid of about a month ago. Since then things have gone very quiet, and the assumption was that the two parties were negotiating behind the scenes.
These proposals have been of considerable interest in the 3D print world because the two companies, if merged together, would become an utterly gigantic force on the scene. It would have by far the largest sales and distribution network, most of the patents and truly enormous resources. The expected savings from combining the two companies, over US$100M annually, is more than the value of most 3D printing companies by itself.
Yesterday there was a press release from 3D Systems indicating that Stratasys had indeed rejected the latest bid.
This is not surprising, given that Stratasys’ value has soared during this corporate saga. Stratasys, once fourth on our weekly leaderboard, now sits at the top. Meanwhile, 3D Systems, long in position one, now sits at fourth place.
As a result of the stock values shifting, 3D Systems’ last bid began to make less sense: offering shares in their company but with those shares being valued lower. In other words, the total value of the 3D Systems proposal sagged precipitously, and that’s likely what caused Stratasys to reject the offer.
3D Systems indicated they intend on delivering a revised proposal to Stratasys, which they believe to worth around US$27 per share. However, 3D Systems also said:
“In addition, Stratasys has informed 3D Systems that, despite 3D Systems’ good faith efforts to reach a negotiated transaction for the benefit of all shareholders, Stratasys’ board of directors continues to support the Desktop Metal merger as its preferred alternative and that the Stratasys board is not interested in any further discussions with or proposals from 3D Systems about a combination.”
3D Systems CEO Jeffrey Graves said:
“It seems there is no price that would satisfy the Stratasys Board. Shareholders of Stratasys have seen their board turn down offer after offer, watching only the consistent destruction of value in the meantime. The latest game appears to be an attempt to ‘run out the clock’ on supposed discussions with us, while always moving ahead with the massively value-destructive merger with Desktop Metal.”
I’m not sure one could agree with that, as it is 3D Systems’ value that has dropped during this period, while Stratasys’ valuation has significant risen. As of this writing, Stratasys is worth 36% more than 3D Systems, while six months ago 3D Systems was worth 52% more than Stratasys. The tables seem to have turned, and the companies are quite different from when all this started.
Nevertheless, it would seem that Stratasys has yet another proposal to evaluate.
I suspect they’ll reject that one, too.
Via 3D Systems
