Stocks rise, 3D Systems outlines value in Stratasys takeover
June 5, 2023
Following the recent merger announcement between Stratasys and Desktop Metal, and the subsequent takeover bid of Stratasys by 3D Systems, each company has seen a rise in stock prices. In the week ending June 2, Stratasys closed at $16.21 (+11.26%); 3D Systems at $9.28 (+11.4%) and Desktop Metal, $2.03 (+6.84%.)
Stratasys has still not issued its ultimate decision with regards to the takeover proposal, however 3D Systems has outlined the possible benefits of such an acquisition for shareholders and the industry.
“The combination of 3D Systems and Stratasys is simply the best outcome for the shareholders of both companies,” stated Dr Jeffrey Graves, president and CEO, 3D Systems. “We feel strongly that now is the time for all parties to recognise the overwhelming logic of our two businesses coming together. We are in a unique position to move with confidence and speed and we encourage the Stratasys Board of Directors to engage with our proposal and make this combination a reality for the benefit of the shareholders, employees and customers of both companies.”
3D Systems has stated that, based on its own research, the combination with Stratasys would lead to Stratasys shareholders owning 40% of the combined company and receiving approximately $540 million in cash. Assuming approximately $100 million in run-rate cost synergies, 3D Systems believes that the combined company is positioned to deliver at least a total value in excess of $1,840 million to Stratasys shareholders (approximately $740 million in excess of Stratasys’ fully diluted market capitalisation using a 60-Day VWAP [Volume-Weighted Average Price] as of May 24, 2023, the last trading day prior to Stratasys’ announcement of its proposal to acquire Desktop Metal) corresponding to approximately $25 per Stratasys share – an approximately 70% value uplift.
3D Systems further outlined the combination’s potential as follows:
- Necessary scale to impact the Additive Manufacturing industry
- Significant value creation
- High-quality financial profile
- Good transaction speed
Dr Graves concluded, “We are at an inflection point in our industry, and we see significant upside for our shareholders and all stakeholders by capturing the benefits of scale, enhancing investment in innovation and delivering long-term profitable growth. We know and respect the Stratasys business and the people who make it a success around the world. We are committed to creating a combined platform that enables these two great companies to serve our global customers and lead the industry with innovative technology offerings.”
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