The battle for control of polymer 3-D printing company Stratasys Ltd. took yet another turn on Friday, when 3D Systems Corp. entered the fray with an offer it says offers superior value than the company’s plan to combine with Desk Metal.
Rock Hill, S.C.-based 3D systems DDD, +11.40% said its cash-and-stock offer is equal to about $25 per Stratasys share SSYS, +11.26%, comprised of $7.50 in cash and 1.2507 newly issued shares. Upon completion, Stratasys shareholders would own 40% of the combined company and receive about $540 million in cash.
Based on a set of assumptions including about $100 million in run-rate cost synergies, 3D said the combined company would deliver value of more than $1.84 billion, about $740 million in excess of the company’s fully diluted market cap using a 60-Day volume-weighted average price as of May 24 — the last trading day prior to Stratasys’ announcement of its proposal to acquire Desktop Metal DM, +6.84%.
That’s about a 70% “value uplift,” said 3D Systems, which delivered the proposal to the Stratasys board on May 30.
That same day, the Stratasys board unanimously rejected an $18-a-share partial tender offer from Nano Dimension Ltd., saying the offer “substantially undervalues Stratasys.”
The two 3-D printing companies have been locked in a battle since Israel-based Nano Dimension NNDM, +2.09% launched an all-cash bid for Stratasys on March 9 and disclosed that it was Stratasys’s largest shareholder with about 14.5% of the outstanding shares.
The board rejected that offer, as well as a sweetened one at $20.05 a share, and instead unveiled the Desk Metal deal, which was valued at $1.8 billion. Just moments after announcing that plan, Nano Dimension came forward with its partial tender at the original $18 a share, seeking to boost its stake in Minneapolis-based Stratasys to 53% to 55%.
On Friday, 3D said a combination with Stratasys would offer a great range of additive technologies and an enhanced ability to invest in innovation. The industry is expected to grow at a compound annual growth rate of about 21% over the next five to seven years.
The combined entity would have revenue in calendar year 2024 of an estimated $1.3 billion, making it the biggest pure-play 3-D player. The deal would offer immediate cash and liquid stock value without any financing condition and is unlikely to face regulatory hurdles.
“We are at an inflection point in our industry, and we see significant upside for our shareholders and all stakeholders by capturing the benefits of scale, enhancing investment in innovation and delivering long-term profitable growth,” said Dr. Jeffrey Graves, 3D’s president and CEO.
Stratasys stock jumped 10% premarket. 3D was up 1.6%.