Update: Stratasys + Desktop Metal = not happening

Stratasys held its shareholder meeting today, and, as predicted, management couldn’t muster the votes to approve the combination with Desktop Metal. As a result, Dov Ofer, Chairman of Stratasys’ Board of Directors, said, “We have decided to undertake a comprehensive and thorough review of all available strategic alternatives. We … will continue to execute our strategy, [and] remain focused on our mission to deliver value to customers and are committed to taking the appropriate actions to maximize value for all Stratasys shareholders.” Read more here.

In a filing with the US SEC, here, 78.6% of shareholders voted against the Desktop Metal deal. That’s pretty definitive — and it’s not clear what happens next. Stratasys CEO Yoav Zeif also wasn’t mentioned in the press release, and it was his vision that led to the Desktop Metal deal. His rationale for the deal was that manufacturers would find it easier to deal with one vendor for both metal and polymer technologies.

Neither the press release nor the filing mentions 3D Systems. (And as far as I can tell, 3D Systems hasn’t issued a statement about what it sees/wants as the next steps.)

What happens next isn’t so obvious. According to the transaction filings, Stratasys must pay Desktop Metal a breakup fee of $32.5 million if it goes for a similar merger or acquisition in the next year — and I imagine that a 3D Systems deal would be similar enough to trigger the penalty. In any case, Stratasys has to reimburse Desktop Metal’s transaction-related costs, up to $10 million.

For its part, Desktop Metal CEO Ric Fulop said, “We are completely confident in the trajectory of our business, which continues to lower operating costs while growing revenue. Our plan to reduce costs and generate revenue remains on track as customers continue transitioning to our AM 2.0 technologies for mass production of metal, polymer, ceramic and health products.” Read more here.

So. All of the players return to their corners and try to figure out what’s next. This isn’t over — we’ll keep monitoring.