The leadership of Nano Dimension has changed, and with it, will come a great deal of turmoil.
The saga of Nano Dimension over the past couple of years has been quite dramatic. From raising a huge cash reserve, to repeated takeover attempts, to successful acquisitions, and some rather interesting videos, the company has been in the news frequently.
Some of that news was not accepted by the company’s investors, who launched a lawsuit against the company and won. This resulted in a dramatic change in the company’s board of directors last week.
I pondered what this would mean for the company, as the investors, who have basically taken control of the company, were against the strategies of the CEO, Yoav Stern. Stern’s approach was to consolidate the industry by a series of corporate acquisitions, some of which were completed.
The investors felt this approach was a poor use of funds and took action. Acquiring a company is not a trivial task; I’ve been involved in several, and it requires a considerable amount of effort to absorb a company sufficiently to reduce costs and gain profit. Taking on several acquisitions at the same time usually increases costs because it’s too hard to do it all at once.
We now know what the new Nano Dimension board of directors wants to do. A brief release from the company states the following:
“Mr. Yoav Stern’s role as CEO has been terminated, effective immediately. The Board is conducting a comprehensive search for a permanent CEO.”
The company has appointed Julien Lederman as the interim CEO. Lederman was the company’s VP of Corporate Development until this switch.
The leadership change almost certainly spells the end of the acquisition spree by Nano Dimension.
This then positions Nano Dimension’s cash reserve as a way to ensure funding of the company for some years as it continues to develop technologies, instead of spending the cash on acquisitions.
There are two rather large questions, however: two of the acquisitions have not yet been completed.
Nano Dimension’s previous management struck deals to acquire Desktop Metal and Markforged. The new management at Nano Dimension almost certainly does not want to complete these deals, so it is unclear whether they will be completed.
Both deals are actually contractual arrangements, where the two parties agree to perform their roles in the acquisition. This is because a number of legal and technical steps must be taken to complete the process. Typically, the contracts include a “break-up” penalty, to be paid if one or the other party decides not to proceed.
We don’t know what those penalties could be in these two separate acquisitions. If they are relatively small, then Nano Dimension might just pay them and move on. If large, then it gets more complicated.
Meanwhile, Desktop Metal launched a lawsuit against Nano Dimension last week, urging the company to complete the acquisition. Evidently, Nano Dimension was required to obtain clearance from the US Committee on Foreign Investment in the United States, “CFIUS”, which ensures that technology does not travel to banned countries. This step has apparently not been completed, and Desktop Metal feels it should have been done by now.
It may be that Desktop Metal saw the management change coming and took an action to try to force the sale as soon as possible. It’s not clear how this will play out, as the details are hidden in the contract between the two parties. The acquisitions may have to proceed, or they may be cancelled.
Meanwhile, Markforged has been quiet, but we may hear something from them soon, as they will need to reassure their shareholders.
Both Markforged and Desktop Metal continue to trade on the stock exchanges independently, as the deal has not closed. Desktop Metal’s valuation dropped noticeably when the Nano Dimension board changes occurred. Markforged’s valuation is up slightly, but still far below the offer price to be paid by Nano Dimension if the deal proceeds.
It may be the holiday season, but there is a lot going on in the corporate world of 3D printing.
Via Nano Dimension
