A quick update on the Additive Ball
Remember how last month there was a will they/won’t they dance going on in the world of additive manufacturing? Well, the dance continues, with news on several fronts.
To recap: Desktop Metal and Stratasys had planned a merger, then another company stepped in to say that it would be better if Stratasys merged with them; THEN 3D Systems popped up with a counteroffer … and it all got messy. The middle player there dropped out, and here we are. Two items to consider:
First, the US Department of Justice’s Antitrust Division wants more info on whether the proposed merger of Stratasys and Desktop Metal meets antitrust rules, and according to my (limited, not a lawyer) understanding of the Hart-Scott-Rodino Antitrust Act, this means that the companies can’t complete their transaction until the companies have “substantially complied” with the additional investigatory request.
Even so, Desktop Metal and Stratasys announced last week that they would each hold special shareholder meetings on September 28, 2023, to consider and vote on their merger agreement. Previous mergers and acquisitions in our space often have to meet regulator approvals –it’s not unusual. The companies agree on the deal and terms, and the shareholders approve; then, everything waits until regulatory approvals are given (or not).
And as if that wasn’t enough,
Last night, 3D Systems announced that it had delivered a sweetened offer that it hopes Stratasys would consider a “superior proposal” that it would accept. As of this writing, Stratasys hasn’t formally acknowledged receiving the offer — but 3D Systems says it was made in response to Stratasys’ requests and offers more stock, a spot for Stratasys’ CEO in the new entity, and other considerations. But, says 3D Systems CEO Jeffrey Graves,
“We listened to shareholder feedback and made a strong effort to reach a friendly transaction but 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. We are confident that shareholders will support our combination and send an unequivocal message to the Stratasys board that they can no longer protect themselves while fiddling away shareholder value.”
We’ll see what, if anything, Stratasys says about the new offer. The next currently known step Stratasys’ shareholder vote: Do they agree with Stratasys’ management that the Desktop Metal offer is best, or do they agree with 3D Systems and all of its statements about cost synergies and market approach. We’ll know on September 29.