2023-06-21 00:00:00
The offer competes with an existing offer from the Desktop Metal company * So far, for three weeks, the offering company has not received a response from Stratasys
3D Systems (NYSE: DDD) provides a business update to its shareholders regarding its proposed merger with Stratasys (NASDAQ: SSYS) in a cash and stock transaction in which each Stratasys share will be converted into $7.50 in cash and 1.2507 new and common shares of 3D Systems to be issued. The merger between the companies will result in Stratsys shareholders owning about 40% of the joint company and receiving about $540 million in cash.
Company President and CEO Dr. Jeffrey Graves said: “Following the positive market response to our proposal and the positive responses we received from a large number of shareholders, we felt it was important to provide a public update to our shareholders, given the fact that Stratasys has not contacted 3D Systems since We sent the offer 21 days ago, and she has not responded publicly beyond confirming the receipt of our offer.”
Dr. Graves continued: “We are confident that the combination of our two companies offers all of our shareholders the most compelling immediate value, long-term upside and certainty of completion of the transaction. The 3D printing industry is at a pivotal moment – and we believe now is the right time to complete this connection to leverage the benefits to scale that our combined company will deliver. We are confident that our offer is superior to the existing deal of Stratasys, therefore we expect that the board of Stratasys will contact us as soon as possible in order to reach an agreement on a deal for the benefit of the shareholders of both companies. We are committed to bringing this connection to fruition as quickly as possible.”
The company cites the strong market response to its proposal, including an 11.26% increase in its Stratasys stock on June 2, 2023, the day 3D Systems’ proposal was revealed to the market. Also, an 11.40% increase in the share price of 3D Systems on the day the offer was revealed resulted in an additional increase in value for the shareholders of both companies. The benefits of the company’s proposal were also highlighted by industry analysts, including Troy Jensen of Lake Street Capital Markets, who noted in an analysis dated June 5, 2023, “If you believe that scalability is required in the 3D industry…then the combination of 3D Systems and Stratis He’s probably the most logical.”
The company confirms the main advantages that will be achieved in the merger, which include:
Creating significant value with very high certaintyAs of the close of trading on June 16, the offer represents a value of $19.31 per Stratasys share, a premium of approximately 30% over the closing price of the Stratasys share on May 24, 2023, the last trading day prior to the announcement of the Stratasys-Desktop Metal deal. Confirms clear operational synergies in the amount of at least 100 million dollars as a result of savings in administrative and general sales expenses, savings as a result of R&D integration and optimization of the selling prices of the products sold, which will be recognized mainly during the first 12 months after the closing of the merger.
Independent fundingThe cash consideration relies on cash already available on the pro forma balance sheet. No additional capital or debt raising is required or considered at this stage.
High certainty of receiving regulatory approvalComplementary platforms with minimal direct product overlap, producing significant synergies in the optimization of R&D expenditures. No closing conditions are required by the Committee on Foreign Investment in the United States (CFIUS) or the International Trade in Arms Regulations (ITAR) o 3D Systems is confident that all regulatory approvals required for the proposed merger will be achieved.
Fast and sure transaction
Entering into a binding merger agreement without delay and under conditions that provide the shareholders of Stratasys with certainty for the transaction to take place at least as in the share-based merger agreement with Desktop Metal
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