3D Systems The company has announced it has signed a merger agreement with StratasysStratasys Board of Directors on September 6, 2020. 3D Systems is now filing the agreement as Form 8-K to the SEC.
3D Systems says the binding offer presents Stratasys shareholders with a ‘certain, superior alternative’ to the planned merger with Desktop MetalStratasys can countersign the document after termination of the agreement. 3D Systems says it is urging Stratasys shareholders to vote no on the Desktop Metal transaction, which it describes as ‘value destroying’, at the Extraordinary General Meeting of Shareholders (EGM) on September 28, 2023.
The company believes a vote against the Desktop Metal merger will ‘send a clear message’ to the Stratasys Board of Directors to accept 3D Systems’ offer. The company’s merger agreement, it says, offers Stratasys investors the chance to enter a transaction with unprecedented scale and significant cost synergies that will enhance financial performance as well as opportunities to invest in growth over the long term.
3D Systems’ binding offer expires on October 5, 2023, giving the Stratasys Board five business days following the conclusion of the EGM to accept.
President and CEO of 3D Systems Dr. Jeffrey Graves said: “Stratasys shareholders are incredibly sceptical of the recent decisions made by Stratasys’ management team and Board, and remain deeply concerned about a potential acquisition of Desktop Metal. In fact, since Stratasys’ rejection of our latest proposal earlier this week, we have heard directly from a significant number of Stratasys shareholders who have urged us to provide them with an alternative.
“We are now making a binding offer that we believe is worth more than $27 per share to Stratasys shareholders, inclusive of cost synergies. We note that Stratasys’ current share price is approaching a 10-year low, trading down close to $12 after their rejection of our proposal, which we believe is starting to reflect the markets valuation of the Desktop Metal combination.”
3D Systems says it believes Stratasys’ reasons for rejecting its proposal and its ‘refusal to continue negotiations’ were either well-known to Stratasys and investors when Stratasys determined that 3D Systems’ July 13 proposal was likely to lead to a ‘superior proposal’, or ‘misleading, self-interested and overly focused on short-term prospects’.
3D Systems says the long-term trajectories of Stratasys and 3D Systems remain ‘fundamentally unchanged’ in the past two months, which it says raises serious questions to the credibility of Stratasys’ evaluation of the 3D Systems proposal. 3D Systems also claims that Stratasys affirmed that its offer would generate ‘significantly more synergies, and therefore value creation’ than any other available alternative.
Dr. Graves added: “It became apparent in our discussions with Stratasys that we were facing an entrenched Board that was only interested in the appearance of engagement to appease shareholders amidst a heated proxy contest, and cared little about delivering true shareholder value. There is no question of the value of our proposal, as Stratasys, even in its attempts to to paint our offer negatively, affirmed $74 to $88 million in cost synergies, which creates significantly more value for Stratasys shareholders than the Desktop Metal transaction.”
Stratasys, in rejecting 3D Systems’ proposal on the 6th of September, reiterated that it supports the Desktop Metal merger. 3D Systems said in its announcement of the delivery of the signed agreement that it believes, along with a ‘significant portion’ of Stratasys’ own shareholders, that the Desktop Metal transaction is based on a ‘speculative valuation’, a ‘highly unlikely’ long-term financial forecast and ‘inferior technology’.
3D Systems says this is coupled with Desktop Metal’s history of ‘value destruction’, through ‘poorly timed’ acquisitions with ‘no track record’ of integrating those acquisitions.
Dr. Graves concluded: “Put simply, we do not believe that the Desktop Metal transaction will drive the unprecedented growth Stratasys states it will. Stratasys’ shareholders will have to decide before their upcoming voting: they can either vote to combine Stratasys with Desktop Metal and continue down a path of value erosion, or they can vote NO to the Desktop Metal transaction and encourage real tangible changes.
“We await the opportunity to execute on our proposed transaction in order to redefine leadership in the additive manufacturing industry, capture immediate financial opportunity, position both of our businesses for long-term success and above all else, maximise shareholder value for both 3D Systems and Stratasys shareholders.”
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