Nano Dimension Ltd. (
Nasdaq: NNDM) (“Nano
Dimension” or the “Company”), a leading supplier of
Additively
Manufactured
Electronics (“AME”) and multi-dimensional polymer,
metal & ceramic
Additive
Manufacturing (“AM”) 3D printers, today announced
that it has made a formal, non-binding offer to acquire Stratasys
Ltd. (Nasdaq: SSYS) (“Stratasys”) for $18.00 per share in cash (the
“Proposed Transaction”). As expressed in Nano Dimension’s
announcement on July 18, 2022, the Company views Stratasys as a
strategic, complementary asset in the relatively mature
polymer-based AM market segment. The Proposed Transaction would
create a market leader with unparalleled portfolio of materials,
software, and deep learning with a go-to-market strength in the
form of sales channels. Nano Dimension’s management has held
constructive, informal discussions with Stratasys regarding the
offer and the merits of the combination.
Under the terms of the proposal, Nano Dimension,
which has been the largest shareholder of Stratasys since July 2022
and currently owns approximately 14.5% of Stratasys’ outstanding
shares (13.7% on a fully diluted basis1), would acquire the
remaining shares of Stratasys for total consideration of
approximately $1.1 billion in cash. The offer price reflects a
premium of 36% to the unaffected closing trading price as of March
1, 2023, and a 31% premium to the 60-day VWAP through March 1,
2023. The proposal delivers immediate and certain value to
Stratasys’ shareholders and vastly strengthens the company’s
ability to capitalize on opportunities and navigate the challenges
of the current environment.
Nano Dimension believes a combination of the two
companies will unlock superior near-, medium- and long-term growth
and value creation opportunities, including:
- Establish a Market-Leading Portfolio of Complementary
Systems, Materials, Software, and Complete Solutions:
Stratasys is positioned as a leader in the developed market for
premium polymer-based 3D printing systems, material and
consumables, with fused deposition modeling (FDM) and PolyJet AM
machines for prototyping, while Nano Dimension is a pioneer in the
high growth segments of 3D printing for some of the most
challenging applications, including electronics, microfabrication,
and high-performance components. The combination will create an
unmatched platform with an unrivaled portfolio of AM for
manufacturing capabilities, complemented by a new suite of high
growth products which, when combined, best position the Company for
continued success.
- Accelerate Research & Development
(R&D): Nano Dimension and Stratasys share a culture of
innovation in process engineering and materials science to create
cutting-edge technological success. The combined company’s R&D
capabilities would be ideally positioned to drive rapid innovation
to meet customer needs in the area of 3D printing, including the
accelerated deployment of Nano Dimension’s deep learning-based AI
group, DeepCube, which is the foundation of its cloud manufacturing
platform.
- Enhance Market Penetration, New Customer Acquisition
& Cross-Selling Opportunities: Combining the two
companies’ capabilities will increase the opportunity to deepen
existing relationships across shared customers and industries by
providing more value-added services and solutions, while also
presenting new customer acquisition opportunities with an expanded
and diversified platform that is unmatched in the industry. The
companies’ respective customer relationships, future opportunities
in many shared industry verticals, and distinct go-to-market
channels will facilitate the sale of a more diverse range of
solutions.
- Generate Significant Synergies: The
combination of Nano Dimension and Stratasys will create significant
synergies by streamlining the organization of the two companies,
including improving cost structure, aligning overhead and
go-to-market efforts and yielding efficiencies by combining R&D
resources.
- Provide Attractive Opportunities to Management and
Employees: The Proposed Transaction represents a unique
opportunity to create significant value for Stratasys management
and employees within an enlarged, globally-leading specialty
additive manufacturing company, among other career benefits. A key
success factor for Nano Dimension to date has been its ability to
retain leaders that join the Company through its M&A strategy
in the pursuit of shareholder value, and a key aspect of Nano
Dimension’s interest in Stratasys is its strong management team,
which it intends to retain as part of the combined business.
- Leader in Growth and Profitability: Most
importantly, the companies together will create a business model
with an envelope that encompasses growth of both the top-line and
bottom-line profitability.
Yoav Stern, Chairman and Chief Executive Officer
of Nano Dimension, shared, “We have great respect for Stratasys’
business, including Chief Executive Officer, Dr. Yoav Zeif, who we
believe is the architect of Stratasys’ recent positive momentum.
Together, Nano Dimension and Stratasys can offer an increasingly
exciting set of solutions for customers while becoming better
positioned to compete in the AME and AM industries. We believe this
is an exceptional opportunity for all stakeholders – shareholders,
customers, management, employees, and business partners – of both
companies. In recent years the AM market has grown in size and
accelerated remarkable technological advancement, and it is on the
cusp of its next phase of development and growth. Bringing
Stratasys and Nano Dimension together is about positioning both
companies to succeed as a combined company and lead the industry
into that next phase. With Nano Dimension’s strong culture of
innovation and track record of successful merger integration, we
expect to unlock significant value for all stakeholders. We look
forward to continuing our discussions with Stratasys to reach a
mutually acceptable transaction.”
The execution of a definitive merger agreement
between Nano Dimension and Stratasys would be subject to due
diligence and approval by each company’s Board of Directors and
completion of the transaction would be subject to customary closing
conditions, including receipt of required regulatory approvals and
approval of Stratasys’ shareholders.
Greenhill & Co., LLC and Lazard Frères &
Co., LLC are acting as Nano Dimension’s financial advisors, and
Sullivan & Worcester LLP is serving as legal advisor.
The full text of the letter delivered to
Stratasys by Nano Dimension on March 6, 2023 is included below.
March 6th, 2023To: The Board of Directors of Stratasys Ltd.
Attn: Dov Ofer, Chairman, and Yoav Zeif, Chief Executive
Officer
Dear Mr. Ofer and Mr. Zeif,
As you are aware, for nearly a year now, Nano
Dimension Ltd. (collectively with its affiliates, “NANO”) has been
a significant shareholder of Stratasys Ltd. (“Stratasys” or the
“Company”) and is currently your largest shareholder with
approximately 14.5% of the Company’s common stock outstanding
(13.7% on a fully diluted basis2). We made our investment
because we have high regard and appreciation for the Company’s
achievements. We have been particularly impressed by the Company’s
trajectory as a polymers’ Additive Manufacturing (“AM”) pioneer
creating the preeminent platform for premium polymers’ 3D printing
systems, material and consumables as well as design and other
supporting software. The combination of these capabilities
together with strategic acquisitions has positioned the Company as
a leading manufacturer of fused deposition modelling (FDM) &
PolyJet AM machines for prototyping.
We believe now is the time to combine our two
companies and are pleased to present to you this non-binding
indicative offer (the “Indicative Offer”), which outlines the
principal terms and conditions under which NANO would propose to
enter into a business combination with Stratasys (the “Proposed
Transaction”). We are highly confident in the merits of the
Proposed Transaction and we strongly believe the offer represents
an attractive proposal for all stakeholders of the Company.
Transaction Terms
NANO seeks to acquire the remaining approximately 85.5% of
Stratasys’ outstanding common shares (86.3% on a fully diluted
basis3) that NANO currently does not own. Under the terms of
the Proposed Transaction:
- NANO will offer all Stratasys shareholders $18.00 per Stratasys
share in cash, reflecting a premium of 36% to the closing trading
price as of March 1st, 2023 and a 31% premium to the 60-day VWAP,
as of March 1st, 2023; this valuation represents a ~24x multiple
based on 2022 adjusted EBITDA of $36.1 million4 and ~21x multiple
based on the midpoint of the Company’s 2023 adjusted EBITDA
guidance of ~$43 million.5
-
A key aspect of NANO’s interest in the Company is the importance of
the current management team staying with the combined
business. We would expect the current management team to
enter into retention programs (performance and time based) for a
few years with various mechanisms to qualify for a cash “stay”
package. We believe a key success factor for NANO to date has
been our ability to retain leaders that join us through our M&A
strategy in the pursuit of shareholder value.
Our Indicative Offer remains subject to the
conditions set out in this letter and is based on the review of
publicly available information on Stratasys, as well as our general
knowledge of the industry. The terms of this Indicative Offer
are further subject to adjustments based on the conclusions from
further due diligence.
Conditions to the Proposed Transaction
Completion of the Proposed Transaction would be
subject to customary conditions, including without limitation the
following:
-
The completion of our due diligence of the Company, which we expect
to primarily include (i) financial and tax review by outside
accountants; (ii) reviewing of the Company’s strategy and
operations through meetings with the Company’s management team; and
(iii) review of legal, intellectual property, environmental, real
estate and other customary matters, and NANO’s satisfaction with
the results thereof.
-
The negotiation and execution of a mutually acceptable transaction
agreement, consistent with transactions of this type.
-
Approval of, and/or consents from, required third parties, lenders
and/or governmental regulatory agencies (including HSR and, if
required, CFIUS approval).
-
Approval of the transaction agreement and other definitive
documentation by our respective Boards of Directors and Stratasys’
shareholders.
-
The Proposed Transaction is not expected to require approval by
NANO’s shareholders.
We present an offer that is both all cash and
fully financed. NANO is a public company (Nasdaq: NNDM;
www.nano-di.com). We have over US$1 billion of cash and cash
equivalents, and no debt. Given our cash position and access
to capital, the Proposed Transaction will not be contingent on
obtaining third-party financing. Our preliminary, unaudited
2022 revenue is over $43M which represents an increase of ~310%
over 2021 and 12x+ our 2020 revenue. NANO’s systems are being sold
in four continents: ~50% of the revenue is generated in the USA,
and the rest in Europe and Asia Pacific, with customers being world
leading defense, aerospace, aviation, medical, advance industrial
electronics producers, research institutes and printing machine
producers.
Cooperation
We are prepared to focus our efforts on the
Proposed Transaction and are confident we can complete our due
diligence and negotiate all definitive documentation within 30
days. Notwithstanding the foregoing, we would expect to
jointly agree on the appropriate timeline to best position the
Proposed Transaction for future success. We are willing to
dedicate meaningful financial and personnel resources to this
project and would expect a similar level of commitment from the
Company.
Advisors
We have retained Greenhill & Co., LLC
(“Greenhill”), Lazard Frères & Co., LLC (“Lazard”) and Sullivan
& Worcester LLP (“Sullivan”) to advise us on this Proposed
Transaction. Any notification under this agreement and any
email exchanged by parties shall be conducted with NANO’s advisors
at the addresses stipulated below:
[Personal advisor details omitted for
privacy.]
This Indicative Offer is not intended to be a
binding contract between us or an offer by us capable of
acceptance, but rather it is a proposal to confirm NANO’s interest
in Stratasys and to facilitate further discussions. NANO and
Stratasys will be bound only in accordance with the terms and
conditions to be negotiated and contained in mutually executed
definitive documentation. This letter shall be governed by
and construed in accordance with the laws of New York, USA, without
regard to principles of conflicts of law.
I would like to reiterate our sincere interest
and enthusiasm in pursuing this opportunity with Stratasys. I
am prepared to marshal our resources to begin the process
immediately and expeditiously complete due diligence and reach an
agreement on definitive documentation. We appreciate your prompt
consideration of our proposal. On behalf of NANO’s management
team and Board of Directors, I look forward to working with you in
pursuit of this compelling combination.
Please understand that we strongly prefer to
engage in a mutually agreed upon collaborative process in order to
work towards an agreement that will deliver significant value to
your shareholders. We hope that our offer will result in a
swift response, engagement and an agreement on a transaction
between the two companies. To that end, we expect to hear
back from you and your board no later than March 13th, 2023, at
12:00 PM ET (17:00 Israel Time).
We remain available both personally as well as
through our advisers to elaborate on our Indicative Offer.
Sincerely,Nano Dimension Ltd.
About Nano Dimension
Nano Dimension’s (Nasdaq: NNDM) vision is to transform existing
electronics and mechanical manufacturing into Industry 4.0
environmentally friendly & economically efficient precision
additive electronics and manufacturing – by delivering solutions
that convert digital designs to electronic or mechanical devices -
on demand, anytime, anywhere
Nano Dimension’s strategy is driven by the application of deep
learning based AI to drive improvements in manufacturing
capabilities by using self-learning & self-improving systems,
along with the management of a distributed manufacturing network
via the cloud.
Nano Dimension serves over 2,000 customers
across vertical target markets such as aerospace & defense,
advanced automotive, high-tech industrial, specialty medical
technology, R&D and academia. The company designs and
makes Additive Electronics and Additive Manufacturing 3D
printing machines and consumable materials. Additive Electronics
are manufacturing machines that enable the design and development
of High-Performance-Electronic-Devices (Hi-PED®s). Additive
Manufacturing includes manufacturing solutions for production of
metal, ceramic, and specialty polymers based applications - from
millimeters to several centimeters in size with micron
precision.
Through the integration of its portfolio of
products, Nano Dimension is offering the advantages of rapid
prototyping, high-mix-low-volume production, IP security, minimal
environmental footprint, and design-for-manufacturing capabilities,
which is all unleashed with the limitless possibilities of additive
manufacturing.
For more information, please
visit www.nano-di.com.
Forward Looking Statements
This press release contains forward-looking statements within
the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995 and other Federal
securities laws. Words such as “expects,” “anticipates,” “intends,”
“plans,” “believes,” “seeks,” “estimates,” and similar expressions
or variations of such words are intended to identify
forward-looking statements. For example, Nano Dimension is using
forward-looking statements in this press release when it discusses
the potential benefits and advantages of the Proposed Transaction,
the potential for a definitive agreement and growth and value
creation opportunities. Because such statements deal with future
events and are based on Nano Dimension’s current expectations, they
are subject to various risks and uncertainties. The execution of a
definitive merger agreement between Nano Dimension and Stratasys
would be subject to approval by each company’s Board of Directors
and completion of the transaction would be subject to customary
closing conditions, receipt of required regulatory approvals and
approval of Stratasys shareholders. Actual results, performance, or
achievements of Nano Dimension could differ materially from those
described in or implied by the statements in this press release.
The forward-looking statements contained or implied in this press
release are subject to other risks and uncertainties, including
those discussed under the heading “Risk Factors” in Nano
Dimension’s annual report on Form 20-F filed with the Securities
and Exchange Commission (“SEC”) on March 31, 2022, and in any
subsequent filings with the SEC. Except as otherwise required by
law, Nano Dimension undertakes no obligation to publicly release
any revisions to these forward-looking statements to reflect events
or circumstances after the date hereof or to reflect the occurrence
of unanticipated events. References and links to websites have been
provided as a convenience, and the information contained on such
websites is not incorporated by reference into this press release.
Nano Dimension is not responsible for the contents of third-party
websites.
NANO DIMENSION INVESTOR RELATIONS CONTACT
Investor Relations | ir@nano-di.com
NANO DIMENSION MEDIA CONTACTSKal Goldberg /
Bryan Locke / Kelsey Markovich |
NanoDimension@fgsglobal.com
1 Assumes the Company has 70.652 million fully diluted shares
outstanding pursuant to the Company’s Annual Report on 20-F filed
with the Securities and Exchange Commission on March 3, 2023, and
based on a per share price of $18.00.
2Assumes the Company has 70.652 million fully diluted shares
outstanding per the Company’s 20-F dated March 3, 2023, and based
on a share price of $18.00
3 Assumes the Company has 70.652 million fully diluted shares
outstanding per the Company’s 20-F dated March 3, 2023, and based
on a share price of $18.00
4 Per the March 2, 2023, earnings release, adjusted from $2.1
million
5 March 2, 2023 earnings release indicates expected adjusted
EBITDA for 2023 in the range of $35-$50 million
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