Stratasys – Desktop Metal Merger Falls Through
Industry giants Stratasys and Desktop Metal have frequently been in the news in the past few years, initially as both companies have undertaken their own mergers and acquisitions. in 2021, DM acquired companies EnvisionTEC and ExOne, specialists in DLP and sand-based 3D printing. The same year, Stratasys acquired the 3D printing materials division of advanced polymers and high-performance plastics company Covestro while also rejecting multiple acquisition bids from Nano Dimension. This consolidation trend brought the two companies into contention as Stratasys launched its own bid to merge with Desktop Metal earlier this year. However, after a long period of uncertainty, this chapter now seems to have come to a close as Stratasys shareholders have rejected the terms of the merger agreement with Desktop Metal which was announced back in May 2023.
As we have previously reported, the talks that first opened in May seemed to indicate that a merger would benefit both companies with an enormous financial boon, as both titans of their own different 3D printing technologies would combine their global networks, earning a speculative $1.1 billion a year by 2025. The merger would also bring some of the biggest names across multiple 3D printing technologies under the same umbrella. However, after closed-door meetings of Stratasys shareholders in August and September, a final vote cast by the shareholders did not meet the necessary limit to approve the terms of the merger and has henceforth been terminated. The announcement has opened up a great deal of speculation as to what lies in the future for both companies.
Stratasys Alters Course
The initial statement from the Stratasys board of directors chairman, Dov Ofer, underlined the change in direction stating, “We have decided to undertake a comprehensive and thorough review of all available strategic alternatives. We are entering this review as the leader in the additive manufacturing space and will continue to execute our strategy, powered by innovation and profitable growth, which has led Stratasys to outpace the competition. Importantly, we remain focused on our mission to deliver value to customers and are committed to taking the appropriate actions to maximize value for all Stratasys shareholders.”
On the other side of the deal, Founder and CEO of Desktop Metal Ric Fulop had this to say: “We’re grateful for our shareholders’ support. While the team at Desktop Metal believed in the merits of our combination, and is disappointed in the outcome of the merger agreement, we are completely confident in the trajectory of our business, which continues to lower operating costs while growing revenue.”
It seems that the future of the two companies lies apart from one another, however, it opens new avenues of speculation including the recent and repeated offers from companies like 3D Systems who have submitted proposals to take over Stratasys which has thus far been soundly rejected. The Stratasys board of directors has since announced that they are exploring “strategic alternatives” for the company, although the nature of those alternatives has yet to be made public. The future is equally obscure for Desktop Metal who, prior to the merger, laid off 12% of its workforce and underwent serious cost-cutting and optimization measures after recording a net loss of $240M in 2021 despite its astounding growth.
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*Cover Photo Credits: 3Dnatives