The offer represents a 36 percent premium to current share prices, but highlights ongoing internal turmoil from shareholders accusing Nano Dimension of mismanagement.
Nano Dimension Ltd., a developer of 3D printing technology and materials, has made a hostile $1.1 billion offer to acquire 3D printing machine maker Stratasys Ltd. The move brought to light significant dissent among Nano Dimension shareholders, who characterized the offer as a last-ditch attempt by Nano Dimension’s board of governors to demonstrate efforts to turn the struggling company around.
Nano Dimension has previously said it views Stratasys as a strategic, complementary asset in the relatively mature polymer-based AM market segment. The proposed transaction would create a company with a portfolio of materials, software, and deep sales channels. Nano Dimension has been the largest shareholder of Stratasys since July 2022 and currently owns approximately 14.5 percent of Stratasys’ outstanding shares.
Nano Dimension wants to acquire the remaining shares of Stratasys for total consideration of approximately $1.1 billion in cash, a 36 percent premium to the unaffected closing trading price on March 1, 2023.
Nano Dimension’s chairman and CEO Yoav Stern says in a video published to Youtube on the morning of March 13, 2023, says Stratasys has good technology and demonstrated strong go-to-market abilities but it’s focus on polymer printing was a hinderance and overpaid significantly for a number of acquisitions.
“They have good assets, not so much their technology which is outdated but good software, good distribution channels and good branding,” said Stern in the video. “The combination of the two companies is going to be amazing because we will bring the growth engines in the technologies which are much more innovative than what Stratasys has. Stratasys is going to bring distribution channels, the go-to market, the existing distribution channels which are very loyal and are hungry for more product, which they don’t have from Stratasys,” Stern said, while lauding Stratasys CEO Yoav Zeif.
The Deal
Stern says Nano Dimension believes a combination of the two companies will unlock growth and value creation, such as:
- Establish a market-leading portfolio of complementary systems, materials, software and complete Solutions
- Accelerate R&D
- Enhance market penetration, new customer acquisition and cross-selling opportunities
- Generate synergies:
- Provide attractive opportunities to management and employees
- Become a leader in growth and profitability
“Together, Nano Dimension and Stratasys can offer an increasingly exciting set of solutions for customers while becoming better positioned to compete in the AME and AM industries. We believe this is an exceptional opportunity for all stakeholders. With Nano Dimension’s strong culture of innovation and track record of successful merger integration, we expect to unlock significant value for all stakeholders. We look forward to continuing our discussions with Stratasys to reach a mutually acceptable transaction,” said Stern in a press release announcing the proposal.
The Dissent
Toronto-based fund manager Murchison Ltd.—the largest shareholder of Nano Dimension, holding about 5.2 percent of the company—does not support the acquisition attempt and has called for “significant change” at Nano Dimension, specifically mentioning CEO Stern and recruiting three Independent Proxy Advisory Firms to support this position. Those firms are Institutional Shareholder Services (ISS), Glass Lewis and Egan-Jones.
“Removing Chairman and CEO Yoav Stern was critical to reversing the trend of underperformance and terrible corporate governance that has plagued Nano Dimension. Notably, each of the proxy advisory firms highlighted the importance of urgency given the potential for near-term value destruction under a Board that has a track record of putting its own interests ahead of preserving shareholder value,” said Murchison in a press release announcing several proposals to appoint Murchison picks Kenneth Traub and Joshua Rosensweig to nano Dimension’s board while removing incumbent directors Stern, Oded Gera, Igal Rotem and Yoav Nissan-Cohen.
The dissidents complain of chronic mismanagement, poor operating performance and lack of faith among shareholders with a stock price that has sunk 77 percent since it’s high in June 2018.
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