3D Systems (NYSE:DDD) (the “Company”) today announced that it has
delivered a signed merger agreement to Stratasys Ltd. (NASDAQ:
SSYS) (“Stratasys”), substantially in the form shared with the
Stratasys Board on September 6, 2023, and as required, will now be
filed on Form 8-K with the SEC by 3D Systems. The binding offer
presents shareholders with a certain, superior alternative to
Stratasys’ planned acquisition of Desktop Metal (NYSE: DM) and can
be countersigned by Stratasys following termination of its merger
agreement with Desktop Metal. 3D Systems urges Stratasys
shareholders to VOTE NO on the value-destructive Desktop Metal
transaction at the September 28, 2023 Extraordinary General Meeting
of Shareholders (“EGM”).
A vote against the Desktop Metal transaction will send a clear
message to the Stratasys Board of Directors to accept 3D Systems’
offer. 3D Systems’ merger agreement offers Stratasys shareholders
the ability to enter into a transaction that creates unparalleled
scale, significant cost synergies to enhance financial performance
and opportunities to invest in long-term growth. 3D Systems’
binding offer will expire on October 5, 2023, giving the Stratasys
Board five business days following the conclusion of Stratasys’ EGM
to accept 3D Systems’ superior offer and secure certain value.
President and CEO Dr. Jeffrey Graves stated, “Stratasys
shareholders are incredibly skeptical 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 share1 to Stratasys shareholders, inclusive of
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 market’s valuation of the Desktop Metal combination.”
Dr. Graves continued, “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 paint
our offer negatively, affirmed $74 to $88 million in projected cost
synergies, which creates significantly more value for Stratasys
shareholders than the Desktop Metal transaction.”
3D Systems believes that Stratasys’ reasons for rejecting the
Company’s 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. While near-term share prices for
all companies in the sector have been pressured, the long-term
trajectories of Stratasys and 3D Systems remain fundamentally
unchanged in the past two months, raising serious questions to the
credibility of Stratasys’ evaluation of the 3D Systems proposal.
Most importantly, Stratasys affirmed that the 3D Systems
combination would generate significantly more synergies, and
therefore value creation, than any other available alternative.
In its rejection of 3D Systems’ September 6th proposal,
Stratasys reiterated its commitment to supporting the Desktop Metal
merger as its preferred alternative. 3D Systems 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. 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. Ahead of their upcoming vote, Stratasys
shareholders have a choice to make: either vote for a Stratasys and
Desktop Metal combination and endure a prolonged path of value
destruction, or VOTE NO on the Desktop Metal transaction to
encourage real tangible change. 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, maximize shareholder value for both 3D Systems
and Stratasys shareholders.”
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.
About 3D Systems
More than 35 years ago, 3D Systems brought the innovation of 3D
printing to the manufacturing industry. Today, as the leading
additive manufacturing solutions partner, we bring innovation,
performance, and reliability to every interaction – empowering our
customers to create products and business models never before
possible. Thanks to our unique offering of hardware, software,
materials, and services, each application-specific solution is
powered by the expertise of our application engineers who
collaborate with customers to transform how they deliver their
products and services. 3D Systems’ solutions address a variety of
advanced applications in healthcare and industrial markets such as
medical and dental, aerospace & defense, automotive, and
durable goods. More information on the company is available at
www.3DSystems.com.
Forward-Looking Statements
Certain statements made in this document that are not statements
of historical or current facts are forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995. Forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause the actual
results, performance or achievements of the company to be
materially different from historical results or from any future
results or projections expressed or implied by such forward-looking
statements. In many cases, forward-looking statements can be
identified by terms such as “believes,” “belief,” “expects,” “may,”
“will,” “estimates,” “intends,” “anticipates” or “plans” or the
negative of these terms or other comparable terminology.
Forward-looking statements are based upon management’s beliefs,
assumptions and current expectations and may include comments as to
the company’s beliefs and expectations as to future events and
trends affecting its business and are necessarily subject to
uncertainties, many of which are outside the control of the
company. The factors described under the headings “Forward-Looking
Statements” and “Risk Factors” in the company’s periodic filings
with the SEC, as well as other factors, could cause actual results
to differ materially from those reflected or predicted in
forward-looking statements. In particular, we note that there is no
assurance that a definitive agreement for the transaction
referenced in this document will be entered into or consummated or
that integration will be successful or synergies will be realized
if such transaction were to be consummated. In addition, we note
that Stratasys is not able to countersign a merger agreement with
3D Systems without first terminating Stratasys’ merger agreement
with Desktop Metal, Inc. (“Desktop Metal”) and that the mutual
consent of both Stratasys and Desktop Metal is necessary for
termination of the Desktop Metal merger agreement. We also note
that Stratasys continues to recommend in favor of the Desktop Metal
merger agreement, which remains in full force and effect, and that
the vote by Stratasys shareholders on the Desktop Metal merger
agreement has not yet occurred but is scheduled for September 28,
2023 based on Stratasys’ public filings. Business combination
proposals, transactions and integrations are subject to numerous
risks and uncertainties. Although management believes that the
expectations reflected in the forward-looking statements are
reasonable, forward-looking statements are not, and should not be
relied upon as a guarantee of future performance or results, nor
will they necessarily prove to be accurate indications of the times
at which such performance or results will be achieved. The
forward-looking statements included are made only as of the date of
the statement. 3D Systems undertakes no obligation to update or
revise any forward-looking statements made by management or on its
behalf, whether as a result of future developments, subsequent
events or circumstances, or otherwise, except as required by
law.
All references to the binding nature of the offer and merger
agreement being proposed by 3D Systems, whether in a press release,
presentation, other document or public statement, are subject to
the contents of the escrow letter that has been delivered to
Stratasys and will be on file publicly with the SEC.
Additional Information
This communication does not constitute an offer to buy or sell
or the solicitation of an offer to sell or buy any securities. This
communication relates to a proposal which 3D Systems has made
for a business combination with Stratasys. In furtherance of this
proposal and subject to future developments, 3D Systems (and, if a
negotiated transaction is agreed, Stratasys) may file one or
more registration statements, proxy statements, tender offer
statements, prospectuses or other documents with the SEC. This
communication is not a substitute for any registration statement,
proxy statement, tender offer statement, prospectus or other
document that 3D Systems and/or Stratasys may
file with the SEC in connection with the proposed
transaction.
Investors and security holders of 3D
Systems and Stratasys are urged to read the
registration statement(s), proxy statement(s), tender offer
statement(s), prospectus(es) and/or other documents filed with
the SEC carefully in their entirety if and when they
become available as they will contain important information about
the proposed transaction. Any definitive proxy statement(s), tender
offer statement(s) or prospectus(es) (if and when available) will
be mailed to stockholders of 3D Systems and/or Stratasys,
as applicable. Investors and security holders will be able to
obtain free copies of these documents (if and when available) and
other documents filed with the SEC by 3D Systems through
the web site maintained by the SEC at http://www.sec.gov.
This document shall not constitute an offer to buy or sell or
the solicitation of an offer to sell or buy any securities, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10
of the U.S. Securities Act of 1933, as amended.
This communication is neither a solicitation of a proxy nor a
substitute for any proxy statement or other filings that may be
made with the SEC. Nonetheless, 3D Systems and its
directors and executive officers and other members of management
and employees may be deemed to be participants in the solicitation
of proxies in respect of the proposed transaction. You can find
information about 3D Systems’ executive officers and
directors in 3D Systems’ definitive proxy statement filed with
the SEC on April 5, 2023. Additional information
regarding the interests of such potential participants will be
included in one or more registration statements, proxy statements,
tender offer statements, prospectuses or other documents filed with
the SEC if and when they become available. These
documents (if and when available) may be obtained free of charge
from the SEC’s website at http://www.sec.gov.
ContactsInvestors:3D
Systemsinvestor.relations@3dsystems.com
MacKenzie Partners, Inc.Dan Burch / Bob
Maresedburch@mackenziepartners.com /
bmarese@mackenziepartners.com
U.S. Media:FTI ConsultingPat Tucker / Rachel Chesley / Kyla
MacLennan3DSystems@fticonsulting.com
Israel Media:Gelbart-Kahana Investor RelationsAviram
Uziaviram@gk-biz.com+972-525329103
1 Calculated as market value of latest 3D Systems proposal as of
September 6th, 2023 adding capitalized value of synergies per
Stratasys share. Capitalized value of synergies per Stratasys share
equals: $110 million in cost synergies, as estimated by 3D Systems
(noting that Stratasys has now publicly confirmed $74-$88 million
of cost synergies for a combination with 3D Systems), multiplied by
15x, multiplied by 46% Stratasys ownership in pro forma entity,
divided by 72.8mm Stratasys fully diluted shares outstanding.
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