Israeli 3D print company Nano Dimension (Nasdaq: NNDM) has announced that it is acquiring US 3D print company Desktop Metal (NYSE: DM). In an all-cash deal Nano Dimension will pay $5.50 per Desktop Metal share for an overall sum of $183 million. Nano Dimension says there could be potential downward adjustments to a share price of $4.07 and a total acquisition price of $135 million.
Desktop Metal is traded on the NYSE with a market cap of $143 million so the deal reflects a 27.3% premium on the current value of the company. Desktop Metal listed on Wall Street through a SPAC merger before the tech bubble burst at a company valuation of $2.5 billion.
Last year Nano Dimension and Desk Top Metal were two of four 3D print companies involved in merger and acquisition attempts. Nano Dimenstion was striving to take control of Israeli polymer 3D solutions company Stratasys (Nasdaq: SSYS), while US company 3D Systems was also bidding to buy Stratasys. For its part, Stratasys was trying to merge with Desktop Metal but that deal collapsed because Stratasys's shareholders were opposed to it.
Nano Dimension is traded on Nasdaq with a market cap of $474 million, having lost 87% of its value since its peak in 2021. The company's share price is up over 10% in premarket trading. For a long while Nano Dimension has sought acquisitions after it raised $1.5 billion in a series of offerings during the tech boom of 2021 and 2022.
Nano Dimension's activist shareholder Murchinson recently sent an open letter to shareholders saying that Desktop Metal's share price had recently jumped leading Murchinson to believe that Nano Dimension was in talks to buy it and that CEO Yoav Stern was trying to buy the directors' loyalty to his initiatives.
Stern said today, "Our combination with Desktop Metal is another step in Nano Dimension’s evolution to become the leader in digital manufacturing, with capabilities in mass manufacturing for critical industrial applications. We’re excited to join forces with an excellent group of technology leaders, all of whom share our vision for transforming manufacturing to Digital Industry 4.0. I look forward to working with Ric Fulop and his team to drive value for all our stakeholders, including creating opportunities for our employees as part of a larger, more diversified global innovative company, driving customer support and generating long-term growing value for shareholders as we focus on profitable growth."
According to the two companies, the advantages in the deal include complementary products, accelerating industry transition to mass production and more. Nano Dimension said, "The combined company will benefit from significantly enhanced scale and a diversified profile with 2023 combined revenue of $246 million, of which 28% was generated by recurring revenue streams from the services and consumables. The combined company’s complementary expertise and leadership in solutions for mass production will create an AM company that has a record of delivering solutions for manufacturing at high volumes." The deal is supposed to save costs of $30 million annually by merging sales, marketing and R&D resources.
At the same time Nano Dimension reported that its second quarter revenue was $14.8 million, up 11%.
Greenhill & Co., LLC, an affiliate of Mizuho, is serving as exclusive financial advisor to Nano Dimension, and Greenberg Traurig and Sullivan & Worcester LLP are serving as Nano Dimension’s legal counsel. Stifel is serving as financial advisor to Desktop Metal, while Latham & Watkins LLP and Shibolet & Co. are serving as legal counsel.
Published by Globes, Israel business news - en.globes.co.il - on July 3, 2024.
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