Nano Dimension Reaffirms Its Vote “Against” Stratasys’ Merger With Desktop Metal
Nano Dimension says merger deal would be highly dilutive, requiring Stratasys to pay premium and give financial support to Desktop Metal with limited upside.
September 22, 2023
Nano Dimension Ltd. reports that it reaffirms its opposition and intends to vote against Stratasys Ltd.'s proposed merger with Desktop Metal and urges Stratasys shareholders to join in casting votes against the transaction at the company’s Extraordinary General Meeting of Shareholders to be held on September 28, 2023.
Nano Dimension is Stratasys’ largest shareholder and owns approximately 14.1% of Stratasys’ outstanding ordinary shares. Nano Dimension’s position has only been further supported in the last week by comparable positions from The Donerail Group LP, one of Stratasys’ largest shareholders, and Institutional Shareholders Services Inc., proxy advisory firms with expertise on such matters.
“We are pleased to see our messages and opposition to the Stratasys-Desktop Metal deal are being echoed by other parties—especially a fellow large shareholder and an independent, respected advisory firm,” says Yoav Stern, CEO of Nano Dimension. “With the deadline to vote quickly approaching, we re-affirm our deep conviction that this merger would be highly dilutive and result in significant value destruction, sacrificing profitability and financial flexibility of Stratasys for limited upside.
“We intend to vote AGAINST the proposed merger,” Stern continues. “It is important to note that abstaining or not voting is not sufficient to express your opposition and we urge our fellow Stratasys shareholders to join us in voting AGAINST the transaction.”
Nano Dimension’s opposition to a merger of Stratasys with Desktop Metal is based on the following rationale:
Nano Dimension contends that Desktop Metal is “a cash-burning former special-purpose acquisition company (SPAC) that has underperformed and destroyed substantial shareholder value.” As of September 13, 2023, Desktop Metal has lost over $3.9 billion of value, representing almost 90% of its equity value, since becoming a public company in 2020, according to Nano Dimension.
Nano Dimension adds that the proposed Desktop Metal merger is a defensive move by “an entrenched board of directors that would be highly dilutive to Stratasys shareholders in the immediate term, leaving shareholders with just 59% ownership of the combined company.” Stratasys shareholders would be giving away 41% ownership to buy a company that is “consistently losing money.”
Just weeks after rejecting Nano Dimension’s offer for Stratasys, at over $25 per share, Stratasys plans to issue shares at today’s value—which is less than half of the prior Nano Dimension all-cash offer that was rejected. This directly contradicts Stratasys’ claim that its stock is undervalued. By using its ordinary shares as consideration, cash-generating Stratasys would be paying a premium price to acquire underperforming Desktop Metal.
Instead of pursuing this “highly dilutive and speculative transaction that contemplates the issuance of new equity at today’s low valuations,” Nano Dimension suggests the board of directors of Stratasys should reconsider an exploration of the numerous offers the company has received at valuations more than double the current share price. “Not doing so demonstrates a neglect of the Stratasys board fiduciary duty and severe governance malpractice,” Nano Dimension contends.
Nano Dimension urges shareholders to vote against the proposed merger. Votes must be received by 11:59 p.m., Eastern time, on Wednesday, September 27, 2023. Holders of Stratasys ordinary shares as of the close of business on August 24, 2023, are entitled to vote at the Stratasys EGM.
Sources: Press materials received from the company and additional information gleaned from the company’s website.
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