Massachusetts-based industrial 3D printer manufacturer Desktop Metal (DM) has filed a second lawsuit against Nano Dimension, naming Markforged as a new defendant in the legal battle. The Delaware Court of Chancery has also granted the motion for an expedited trial in Desktop Metal’s first Nano Dimension lawsuit, scheduled for the week of February 24, 2025.
The new suit claims that Nano’s planned $115 million acquisition of Markforged, announced in September 2024, violated its merger agreement with Nano Dimension. Amid ongoing delays in obtaining CFIUS approval, DM alleges that the Markforged deal now threatens the merger’s completion.
The company is now seeking a court order to prevent Nano Dimension and Markeforged from finalizing their transaction until the merger is finalized. Desktop Metal CEO Ric Fulop previously stated that a failure to merge with Nano Dimension would constitute a “fatal prognosis” for Desktop Metal. The company has reemphasized the “significant strategic opportunity” the combination represents for both parties, expressing confidence that the merger “may be completed expeditiously.”
Desktop Metal secures expedited Nano Dimension trial
In July 2024, it was announced that Nano Dimension was set to acquire Desktop Metal in an all-cash transaction worth approximately $183 million, or $5.50 per share. This combination sought to create a larger, more diversified company to accelerate growth and generate long-term value for shareholders. At the time, it was reported that the new entity would offer a strong financial profile, with joint FY’23 revenue of $246M, 28% of which was recurring.
This agreement came amid a period of financial challenges for Desktop Metal. Q2’24 saw revenues fall 26.9% YoY to $38.9 million. Despite working “tirelessly” to align its cost structure with the “macroeconomy realities,” the quarter witnessed an operating loss increase of 108.8% YoY to -$101.3 million. This led Fulop to identify the Nano merger as “the best path forward” for the company. In a call with investors, he argued that failing to finalize the transaction could spell the end of Desktop Metal’s existence.
However, as 2024 came to a close, doubts were raised over the merger agreement. Desktop Metal filed a lawsuit against Nano Dimension, alleging the Israeli company failed to make “reasonable best efforts” to secure the deal’s timely regulatory approval.
Filed in the Delaware Court of Chancery, the firm has called on Nano to cooperate with the Committee on Foreign Investment in the United States (CFIUS) to finalize a mitigation agreement and complete the transaction. It is also seeking a Court declaration that Nano Dimension has not met its contractual obligations and requests injunctive relief to prevent additional actions that may hinder the merger’s completion.
At a hearing Delaware Court of Chancery on December 30, 2024, Desktop Metal’s motion for an expedited trial was granted. This is expected to be scheduled for the final week of February. Nano Dimension argued that the lawsuit is “without merit” and “inconsistent with the terms of the Merger Agreement.”
Desktop Metal launches second lawsuit against Nano Dimension
Desktop Metal filed a second lawsuit against Nano Dimension on December 31, 2024. This suit names Markforged as a defendant, alleging that Nano’s agreement to acquire the 3D printer manufacturer violated its obligation to “not consummate acquisitions” that threaten the completion of its own merger.
Desktop Metal did not initially believe the Markforged acquisition would impact its own deal. At the time of the announcement, “all parties anticipated that the Merger would close before the Markforged Transaction could close.”
However, Nano Dimension’s failure to achieve CFIUS approval has led Desktop Metal to believe the Markforged transaction could “materially increase the risk of a governmental entity preventing or delaying the consummation of the Merger.” As such, the plaintiff is seeking an order restraining the closure of Nano Dimension’s Markforged deal until after it has completed the Desktop Metal merger.
Desktop Metal expressed that it remains focused on completing the agreed merger and “upholding the contractual obligations agreed upon by both parties.”
Will Nano Dimension buy Desktop Metal and Markforged?
Recent boardroom changes and shareholder battles have raised doubts over whether Nano Dimension will finalize the Desktop Metal and Markforged agreements. At the beginning of December, a shareholder vote saw then-CEO Yoav Stern removed from the Nano Dimension Board.
The decision was made during the company’s Annual General Meeting of Shareholders (AGM), which also saw incumbent Director Michael X. Garrett removed. Meanwhile, Ofir Baharav and Robert Pons, nominated by activist shareholder Murchinson Ltd., were elected to the Board of Directors. Following this, six of Nano Dimension’s incumbent directors, Dr. Yoav Nissan-Cohen, Eitan Ben-Eliahu, Oded Gera, Roni Kleinfeld, Chris Moran, and Georgette Mosbacher, resigned from the Board. This left Baharav and Pons, along with Kenneth Traub and Dr. Joshua Rosensweig, as the remaining Nano Dimension Board members. Traub and Rosensweig were elected during an extraordinary general meeting (EGM) in March 2023. However, Nano Dimension contested the legality of these appointments, meaning the vote wasn’t upheld until the Israeli District Court validated the results on November 21, 2024.
Before the 2024 AGM, Murchinson published a letter calling the offers for Desktop Metal and Markforged “overpriced” and “misguided.” In a press release, Murchinson outlined an opportunity for the reconstructed Board to “carefully and critically examine … the merits and success of past and present acquisitions,” further reflecting its opposition to Nano’s M&A activity.
At the time, Murchison owned approximately 7.1% of Nano Dimension’s outstanding shares and achieved this boardroom victory as it jostled for power over the Israeli electronics 3D printing company. The firm claimed that the reshuffling represented a “strong message” from shareholders.
Later in December, Murchinson scored another victory when Yoav Stern’s termination as Nano Dimension CEO was announced. Appointed in 2020, Stern was replaced by interim CEO Julien Lederman. Murchinson had long criticized Stern’s stewardship, repeatedly challenging his leadership by raising concerns over capital allocation and poor governance. The removal of Stern, a vocal advocate for Nano’s M&A activity, raises further uncertainties around the Markforged and Desktop Metal agreements.
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Featured image shows Nano Dimension offices in Munich. Photo by Michael Petch.
