Nano Dimension acquires Desktop Metal for $183m

Israeli 3D printing company Nano dimensions Nano Dimension (NASDAQ: NNDM) announced that it is acquiring U.S. 3D printing company Desktop Metal (NYSE: DM). In an all-cash transaction, Nano Dimension will pay $5.50 per share of Desktop Metal for a total consideration of $183 million. Nano Dimension says there are potential price adjustments to the stock at $4.07 and a total acquisition price of $135 million.

Desktop Metal trades on the New York Stock Exchange with a market cap of $143 million, so the deal reflects a 27.3% premium to the company’s current value. Desktop Metal went public on Wall Street through a SPAC merger before the tech bubble burst with a company valuation of $2.5 billion.

Last year, Nano Dimension and Desk Top Metal were among four 3D printing companies involved in merger and acquisition attempts. Nano Dimension was seeking control of Israeli 3D Polymer Solutions Stratasys (NASDAQ: SSYS), while US company 3D Systems was also making a bid for Stratasys. Stratasys, for its part, was trying to merge with Desktop Metal but that deal fell apart because Stratasys shareholders were opposed to it.

Nano Dimension trades on the Nasdaq with a market cap of $474 million, having lost 87% of its value since its peak in 2021. The company’s stock price rose more than 10% in premarket trading. Nano Dimension has long been on the hunt for an acquisition after raising $1.5 billion in a series of offerings during the tech boom of 2021 and 2022.

Activist shareholder in Nano Dimension Murchinson recently sent an open letter to shareholders saying that Desktop Metal’s stock 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 managers’ loyalty to his initiatives.

“Our combination with Desktop Metal represents another step in Nano Dimension’s evolution to become a leading digital manufacturing company, with mass manufacturing capabilities for critical industrial applications,” Stern said today. “We are excited to join an excellent group of technology leaders, all of whom share our vision for transforming manufacturing into a digital Industry 4.0. I look forward to working with Rick Fulop and his team to drive value for all of our stakeholders, including creating opportunities for our employees as part of a larger, more diverse, global innovation company, driving customer support, and generating long-term shareholder value as we focus on profitable growth.”

The benefits of the deal include complementary products, accelerating the industry’s transition to mass production, and more, according to the companies. “The combined company will benefit from significantly enhanced scale and a diversified portfolio with combined 2023 revenues of $246 million, of which 28% will be generated from recurring revenue streams from services and consumables,” Nano Dimension said. “The combined company’s complementary expertise and leadership in mass production solutions will create an additive manufacturing company with a track record of delivering high-volume manufacturing solutions.” The deal is expected to generate $30 million in annual cost savings through the consolidation of sales, marketing, and R&D resources.

Meanwhile, Nano Dimension reported second-quarter revenue of $14.8 million, up 11%.

Greenhill & Co., LLC, a Mizuho company, is serving as exclusive financial advisor to Nano Dimension, and Greenberg Traurig and Sullivan & Worcester LLP is serving as legal advisor to Nano Dimension. Stifel is serving as financial advisor to Desktop Metal, and Latham & Watkins LLP and Shibolet & Co. are serving as legal advisors.

This article was published in Globes, Israeli Business News – en.globes.co.il – on July 3, 2024.

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