The plot thickens between Nano Dimension, Desktop Metal, and Markforged: another lawsuit has been filed.
To recap, Nano Dimension has had a strategy of acquisition, scooping up several 3D print companies over the past two years. They currently have signed deals to acquire or merge with Desktop Metal and Markforged, two notable companies in the space. However, these deals have not yet closed, as some regulatory clearances have yet to be obtained.
Meanwhile, a majority of Nano Dimension’s shareholders disagreed with the acquisition strategy, feeling that the company’s cash reserve could be spent in more effective ways. The group took the company to court — and won! As a result, the board of Nano Dimension resigned, replaced by a new group of shareholders that no doubt have different strategies in mind. Their first act was to dismiss the takeover-crazed CEO of the company.
Desktop Metal has been patiently awaiting the closure of the deal, and the other week filed a lawsuit against Nano Dimension, claiming that they should have completed the regulatory approvals by now. The lawsuit asks Nano Dimension to get it done ASAP.
Now the news is that there is yet another lawsuit. This one, also coming from Desktop Metal, is against Nano Dimension and Markforged. According to Markforged, the lawsuit says:
“The Complaint generally alleges that Nano breached the terms of its merger agreement with Desktop Metal by subsequently entering into the Merger Agreement with Markforged, and that closing the Merger prior to the pending merger between Desktop Metal and Nano (the “Desktop Metal Merger”) would jeopardize the parties’ ability to close the Desktop Metal Merger. In the Complaint, Desktop Metal is seeking, among other forms of relief, an order from the court enjoining consummation of the Merger until the Desktop Metal Merger has closed.”
Unsurprisingly, Markforged feels the lawsuit is unjustified. As of this writing, there is no mention of this new lawsuit on Desktop Metal’s investor page. Similarly, there is no mention from Nano Dimension. That could change as the lawsuit is new and obviously there could be discussion among the parties behind the scenes.
My take on this is that it may be that Desktop Metal sees the window of merger opportunity closing with the leadership changes at Nano Dimension. It’s likely the acquisitions will be cancelled by Nano Dimension, as that was the primary mission behind the leadership change.
Desktop Metal may realize this, and is seeking some approach to get at least something out of the deal. There is very likely a private penalty fee written into the merger agreement, that requires one or the other parties to pay up, should they decide not to proceed. We don’t know what that breakup fee could be, but it may be that Desktop Metal is looking for a way to enhance the amount or otherwise gain something for their efforts. For example, if they have a case, then Nano Dimension might pay Desktop Metal a sufficient amount to drop the lawsuit.
I don’t believe this move changes the odds of the acquisitions completing, which are now low, but may change the way in which the matter concludes.
Via Markforged
