3D Systems enhances proposal to combine with Stratasys

June 27, 2023

3D Systems, Rock Hill, South Carolina, USA, has submitted an enhanced proposal to the Board of Directors of Stratasys which would combine the companies in a cash & stock transaction that would convert each Stratasys ordinary share into $7.50 in cash and 1.3223 newly issued shares of 3D Systems stock. Under the terms of the revised offer, Stratasys shareholders would own approximately 41% of the combined company and receiving approximately $540 million in cash at the time of consummation of the transaction.

While this follows on from Stratasys’ previous rejection, 3D Systems’ June 27 proposal is said to represent meaningful enhancements to the original proposal submitted May 30, 2023, and continues to be underscored by prior discussions between 3D Systems’ and Stratasys’ management teams, including a diligence meeting held in September 2022.

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Of this initial rejection, 3D Systems stated its belief Stratasys “relies on assumptions that are unfounded and unreasonable in order to claim its acquisition of Desktop Metal will create significant value.” The original press release – which can be read here – details the perceived assumptions in full.

3D Systems believes the June 27 proposal is superior to Stratasys’ announced combination with Desktop Metal. The company reported the following aspects of its proposal:

  • Improved value
    • As of market close on June 26, the proposal represents a value per Stratasys share of approximately $20 based on 3D Systems’ ten-day volume-weighted average price (VWAP), representing a premium of 33% to the Stratasys closing share price on May 24, 2023, the last trading day prior to the announcement of the transaction with Desktop Metal
    • Inclusive of estimated cost synergies, represents a value of at least approximately $26 per Stratasys share, or an approximately 71% value uplift, inclusive of cost synergies
    • 3D Systems would also be open to offering Stratasys shareholders the opportunity to choose their preferred consideration mix, subject to customary limits on the aggregate amount of cash and stock 3D Systems will include in the transaction
  • Improved certainty
    • Entrance into a definitive merger agreement on terms that provide Stratasys shareholders with at least as much deal certainty as the existing all-stock merger agreement with Desktop Metal
    • No CFIUS or ITAR approvals required, unlike the proposed Stratasys-Desktop Metal transaction, and continued confidence that all applicable regulatory clearances will be obtained

“We are resolute in pursuing a friendly combination of 3D Systems and Stratasys,” stated Dr Jeffrey Graves, president and CEO, 3D Systems. “It is clear to us that we have presented the Stratasys Board with a superior proposal to the proposed Desktop Metal transaction. We believe there is no better opportunity to leverage the combined strength of our complementary portfolio and create an innovative additive manufacturing leader with unmatched global scale and we are encouraged by the overwhelmingly positive response we’ve received from the market.”

“As we have shown through our enhanced proposal, we remain ready and willing to deliver our collective shareholders the tremendous value creation potential offered by a combination of our two companies,” Graves concluded. “We strongly urge the Stratasys Board to engage with us constructively on a friendly agreement for the benefit of our collective shareholders, employees and customers.”

Goldman Sachs & Co. LLC is acting as exclusive financial advisor and Freshfields Bruckhaus Deringer (US) LLP, together with Herzog, Fox & Neeman in Israel, is acting as legal counsel to 3D Systems in connection with the proposed transaction.

On June 27, 3D Systems hosted a simultaneous conference call and webinar to detail its new proposal. The video is available here on-demand.

www.stratasys.com

www.3dsystems.com

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