Nano Dimension has upped their offer to buy Stratasys, but is it enough?
The controversy continues at Nano Dimension. The company has been undergoing significant disagreements between company management and its shareholders. This has resulted in multiple legal moves, and most recently changes in board of directors structure.
The focus of the disagreement is all about a massive cash hoard of US$1.1B held by Nano Dimension as a result of prior investment. Company management wants to spend the cash on acquisitions of other companies, while the shareholders apparently donât have confidence in the management to execute them successfully, and would rather the investment be returned to shareholders.
Amidst this kerfuffle, Nano Dimension management announced a surprise offer to acquire industry leader Stratasys by providing a slight premium over current stock pricing to Stratasys shareholders.
The offer was seen poorly by industry observers, who almost universally believed the offer was far too low for Stratasys to consider. Accordingly, Stratasysâ board last week politely announced they had unanimously rejected the offer.
My thought was that would be the end of the issue, in spite of Nano Dimensionâs management wishing to appeal directly to Stratasys shareholders and bypassing their boardâs recommendation. But without endorsement from Stratasysâ board, it is highly unlikely many Stratasys shareholders would take up the offer.
By the way, the Nano Dimension offer simply raised the Stratasys valuation to what it was only eight months ago, and itâs quite likely that many Stratasys shareholders bought in at prices even higher than Nano Dimensionâs offer. Why would they accept the offer?
Nano Dimensionâs management insists the proposal was fair and their flamboyant CEO Yoav Stern has been publishing daily half-hour videos explaining their position.
Now Nano Dimension seems to have heard the message and has raised their offer for Stratasys.
The new offer is slightly higher than the previous offer. They explain:
âUnder the terms of the Improved Proposal, Nano Dimension would acquire the remaining shares of Stratasys it does not currently own for an aggregate of approximately $1.2 billion on a fully diluted basis. This offer represents a premium of 37% to the closing trading price as of March 3rd, 2023, a 40% premium to the Companyâs 30-day VWAP, 51% premium to the 60-day VWAP and a 47% premium to the 90-day VWAP as of March 3rd, 2023. Nano Dimension has been the largest shareholder of Stratasys since July 2022 and currently owns approximately 14.5% of Stratasysâ outstanding shares (13.7% on a fully diluted basis).â
Stern said:
âOur increased, all-cash offer demonstrates our commitment to consummating this strategic combination, which will deliver immediate and certain value to Stratasys shareholders at a compelling premium and enable us to create the preeminent leader in the rapidly growing AM market. We are prepared to move quickly to complete our due diligence and engage with Stratasys to finalize a mutually agreeable transaction.â
And:
âWe again invite the Stratasysâ board of directors (âStratasysâ Boardâ) to engage in an open and constructive dialogue with us around a combination of our businesses. We also urge the Stratasys Board to take immediate steps to remove the companyâs âpoison pillâ and allow shareholders to voice their opinion on the proposed transaction and we are committed to giving Stratasys shareholders the power to decide on the merits of our compelling offer.â
The new offer is nine percent larger than the previous offer, which was almost universally regarded as far too low. Iâm not sure an increase of nine percent is going to do the trick here.
Also note that the new offer is valued at US$1.2B, which just happens to be close to the entire cash reserve of Nano Dimension. I had thought they could not raise their offer because they simply didnât have much more money. Apparently they had nine percent more.
I suspect this increased offer will be again politely rejected by Stratasys.
Via Nano Dimension
