More details on the merger between Stratasys and Desktop Metal have been released. A full timeline, to date, of the $1.8 billion acquisition of Desktop Metal is available in a recent SEC filing from the company and reproduced below.
The deal began in early 2021 as a takeover proposal by Desktop Metal to buy Stratasys for $60 per share in a stock-for-stock transaction. Stratasys shares were trading at $20.72 at the end of 2020, but would soar to $51.72 by early February 2021. This initial proposal was rejected by the Stratasys board as it “undervalued Stratasys in light of its standalone prospects.” Stratasys shares returned to the $20 to $26 price range until November 2021, reaching almost $35.
The prospect of a business combination was reactivated in a formal manner in November 2022, when Stratasys and Desktop Metal signed a Mutual Confidentiality and Non-Disclosure Agreement. On March 5th 2023, Stratasys received a proposal from Desktop Metal “for a transaction in which Stratasys and Desktop Metal would combine in a stock-for-stock merger transaction.”
On May 3rd 2023, Stratasys “delivered a non-binding indication of interest” in “a stock-for-stock merger transaction pursuant to which Desktop Metal would be merged into Stratasys (through a merger into a wholly owned subsidiary of Stratasys).”
Also included in the filing is the news that Stratasys has rejected the latest approach by Nano Dimension stating, “the Stratasys Board unanimously recommends that Stratasys shareholders REJECT the Offer and NOT tender any of their Stratasys ordinary shares to Nano pursuant to the Offer AND deliver a Notice of Objection against the Offer.”
Stratasys describes the Nano Dimension bid as, “highly opportunistic and part of a self-interested campaign by Nano to acquire control of Stratasys.” The company continues to add, “The Stratasys Board believes that Nano’s campaign to acquire Stratasys is motivated at least in part by a desire to distract its own shareholders from Nano’s internal problems, including a track record of value destruction, poor governance and conflicts of interest, with the timing and process of the campaign driven at least in part by the timing of its upcoming court hearings against Murchinson in June and July. As noted by the Israeli court in its April 16, 2023 decision with respect to the ongoing dispute between Murchinson and Nano, “it is doubtful whether the shareholders [of Nano] trust [its] board composition and the decisions made by it.””
Desktop Metal has announced a limited-duration shareholder rights plan. The plan will act in a similar manner to the poison pill Stratasys adopted in July 2022 after seeing Nano Dimension building a position. Should a group or individual accumulate 15% or more Desktop Metal common stock, then the poison pill will be activated. If a tender offer that results in such ownership is implemented, the defense strategy would also be triggered. The shareholder rights plan expires at the earlier of the completion of the Stratasys merger, currently planned for the end of 2023, or July 2024.
Timeline of Stratasys and Desktop Metal Acquisition
Details per SEC filing on 30th May 2023:
Beginning in January 2021, Mr. Yoav Zeif, Chief Executive Officer of Stratasys, and Ric Fulop, Chief Executive Officer of Desktop Metal, periodically discussed potential collaborations between and a combination of Stratasys and Desktop Metal.
On February 9, 2021, Desktop Metal delivered to Stratasys a non-binding, preliminary indication of interest to acquire Stratasys in a stock-for-stock transaction on the basis of $60.00 per Stratasys ordinary share (the “Initial DM Proposal”).
On February 24, 2021, Mr. Zeif met with Mr. Fulop to convey that, after careful review and deliberation with the members of management and advisors present at the board meeting, the Stratasys Board unanimously determined that the Initial DM Proposal undervalued Stratasys in light of its standalone prospects and was therefore not in the best interests of Stratasys and its shareholders and rejected the Initial DM Proposal.
On July 18, 2022, Nano issued a press release announcing that it owned approximately 12.12% of the then-outstanding Stratasys ordinary shares. The press release stated that the purpose of Nano’s purchase of Stratasys ordinary shares was the “formation of a strategic investment in a market-leader which is well established in a relatively seasoned market segment.”
Also on July 18, 2022, Nano filed a Schedule 13G with the SEC disclosing beneficial ownership of 12.1% of outstanding Stratasys ordinary shares. In the Schedule 13G, Nano certified that the Stratasys ordinary shares “were not acquired and are not held for the purpose of or with the effect of changing or influencing the control of the issuer of the securities and were not acquired and not held in connection with or as a participant in any transaction having that purpose or effect, other than activities solely in connection with a nomination under § 240.14a-11.”
On July 24, 2022, the Stratasys Board held a meeting to discuss the potential adoption of a shareholder rights plan and other actions that Stratasys could take in response to Nano’s accumulation of Stratasys ordinary shares. Following such discussion, the Stratasys Board determined that a shareholder rights plan was in the best interests of the Company and its shareholders and unanimously approved the adoption of a limited duration shareholder rights plan (the “Rights Plan”).
On July 25, 2022, Stratasys announced the adoption of the Rights Plan, which expires on July 24, 2023. The press release announcing its adoption stated that the Rights Plan “is designed to reduce the likelihood that any entity, person or group would gain control of, or significant influence over, Stratasys through the open-market accumulation of the Company’s shares without appropriately compensating all Stratasys shareholders for control.” The Rights issuable under the Rights Plan are exercisable only if a person or group of beneficial ownership acquires 15% or more of Stratasys ordinary shares, subject to certain exceptions.
On November 5, 2022, Stratasys and Desktop Metal entered into a Mutual Confidentiality and Non-Disclosure Agreement in connection with a potential business combination transaction (the “Desktop Metal NDA”).
On December 12, 2022, Stratasys and Desktop Metal amended the Desktop Metal NDA to include certain standstill provisions.
On December 14, 2022, Nano filed a Report of Foreign Private Issuers on Form 6-K with the SEC announcing the results of its Special General Meeting of Shareholders held on December 13, 2022 (the “Nano Special Meeting”). Nano reported that at the Nano Special Meeting, the Nano shareholders voted to reject all agenda items proposed by Nano’s board of directors, as set forth below:
| ● | “to increase the Company’s registered share capital and to cancel its nominal value per share and to amend and restate the Company’s Amended and Restated Articles of Association to reflect the same; |
| ● | to approve an update to the form of the Company’s Indemnification Agreement with its directors and officers and to amend and restate the Company’s Amended and Restated Articles of Association to reflect the same; and | |
| ● | to approve amended and restated Series B Warrants in consideration of an additional investment by Mr. Yoav Stern, the Company’s Chief Executive Officer and Chairman of the Board, in a warrant transaction.” The amendment and restatement would have re-priced such warrants previously awarded to Mr. Stern by reducing the exercise price from $6.16 to $2.46 per share. |
On January 23, 2023, Murchinson Ltd. (“Murchinson”), Nano’s largest shareholder, filed a Schedule 13D with the SEC disclosing beneficial ownership of 5.1% of outstanding Nano ordinary shares. In the Schedule 13D, Murchinson stated that it had delivered a letter to Nano’s board of directors demanding, pursuant to the Companies Law, that Nano convene a special general meeting of shareholders.
On January 30, 2023, Nano announced that it rejected Murchinson’s request to call a special meeting, arguing that the demand failed to comply with the requirements set forth under the Companies Law. On the same day, Nano announced that it had adopted a limited duration shareholder rights plan on January 27, 2023.
On February 7, 2023, Murchinson submitted a motion for temporary relief against Nano in the Central Region District Court in Lod in Israel (CC 15670-02-23), followed by a statement of claim, requesting an interim injunction ordering Nano to refrain from allotting any Nano ordinary shares in a way that may harm or otherwise affect Murchinson’s demand to call a special meeting, and to notify the shareholders in advance of any transaction not within the regular course of business.
On February 8, 2023, Murchinson announced it had communicated to Mr. Stern and Nano’s board of directors urging them to refrain from any dilutive or defensive transaction intended to further entrench its current leadership.
On February 13, 2023, Murchinson announced that a Special General Meeting of Nano shareholders would be held on March 20, 2023 (the “Disputed Nano Shareholder Meeting”) and filed a Notice of the Meeting and Related Proxy Materials for the Meeting with the SEC related thereto, at which a proposal to remove four current directors of Nano, including Mr. Stern, would be voted on, among other proposals.
On February 27, 2023, Nano submitted a statement of claim against Murchinson and its affiliates in the Central Region District Court in Lod in Israel (CC 64458-02-23), requesting, inter alia, an order declaring that the Disputed Nano Shareholder Meeting did not meet the conditions required under the law and Nano’s articles of association. On February 28, 2023, Murchinson sought to expedite the court’s consideration of the action, which Nano opposed.
On February 28, 2023, the Stratasys Board held a meeting at which, among a number of other matters, certain transaction opportunities were discussed. At this meeting, the Stratasys Board received an update from members of Stratasys’ management team regarding discussions with representatives of Desktop Metal relating to a potential transaction.
On March 5, 2023, Mr. Zeif received a proposal from Desktop Metal for a transaction in which Stratasys and Desktop Metal would combine in a stock-for-stock merger transaction. Over the following 11 weeks, Desktop Metal and Stratasys continued to discuss the terms of a potential stock-for-stock merger transaction.
On March 6, 2023, the Stratasys Board received an unsolicited proposal from Nano to acquire the outstanding Stratasys ordinary shares for $18.00 per share in cash (the “Initial Proposal”).
On March 8, 2023, Murchinson issued a public letter to Nano’s shareholders encouraging them to vote at the upcoming Disputed Nano Shareholder Meeting. An appendix of questions for Mr. Stern and the board of directors of Nano was attached to the press release, including a question regarding Nano’s rationale for “taking an activist position in Stratasys” and why Nano was “spending its time and money acting like an activist hedge fund and not focusing on 3D printing.”
On March 8, 2023, Mr. Stern delivered a text message to Mr. Zeif requesting a meeting to discuss the Initial Proposal.
On March 9, 2023, Murchinson issued a press release announcing that Institutional Shareholder Services Inc. (“ISS”) had recommended that Nano shareholders vote to support all of Murchinson’s proposals at the Disputed Nano Shareholder Meeting, including the removal of Mr. Stern and three other Nano directors.
On March 9, 2023, Mr. Zeif met with Mr. Stern for the first and only time. At this meeting, Mr. Stern described the Initial Proposal and the reasons Mr. Stern believed the Initial Proposal would be attractive to Stratasys and its shareholders. Mr. Zeif did not provide substantive feedback to or engage in any substantive discussion with Mr. Stern regarding the Initial Proposal or Nano’s interest in acquiring Stratasys or any Stratasys ordinary shares. Mr. Zeif made clear that the Stratasys Board would review the Initial Proposal with its financial and legal advisors.
Later on March 9, 2023, following the meeting between Mr. Zeif and Mr. Stern, Nano publicly announced the Initial Proposal. Following the announcement by Nano, Stratasys issued a press release confirming that it had received the Initial Proposal and announcing that the Stratasys Board would review and evaluate the Initial Proposal.
On March 10, 2023, Anson Funds (“Anson”), a Nano shareholder reportedly owning 5.1% of Nano outstanding ordinary shares, issued a press release, stating that it did not support Nano’s contemplated unsolicited takeover of Stratasys in light of the ongoing proxy contest stemming from Murchinson’s proposals to, among other things, remove four current directors of Nano.
On March 12, 2023, Murchinson issued a press release announcing that Glass Lewis & Co. (“Glass Lewis”) and Egan-Jones Rating Company had joined ISS in recommending that Nano shareholders vote to support all of Murchinson’s proposals at the Disputed Nano Shareholder Meeting. In the press release, Murchinson also reiterated Glass Lewis’ position that Nano’s recent hostile offer to acquire Stratasys “reflects a potential last ditch effort by the board [of directors of Nano] to demonstrate its efforts to effect a turnaround of [Nano].”
On March 13, 2023, Nano issued a press release announcing that a preliminary hearing on its statement of claims against Murchinson and its affiliates in the Central Region District Court in Lod in Israel (CC 64458-02-23) concerning the validity of the Disputed Nano Shareholder Meeting would be held on June 18, 2023.
On March 16, 2023, the Stratasys Board held a meeting to, inter alia, conduct an initial evaluation of the Initial Proposal with its advisors. Members of Stratasys’ management, as well as representatives from J.P. Morgan, Stratasys’ financial advisor (“J.P. Morgan”), and Wachtell, Lipton, Rosen & Katz (“Wachtell Lipton”) and Meitar Law Offices (“Meitar”), Stratasys’ legal advisors, were present at the meeting. J.P. Morgan presented its financial analysis of the Initial Proposal and other opportunities available to the Company, and Stratasys’ legal advisors updated the Stratasys Board on the Disputed Nano Shareholder Meeting, including Murchinson’s proposals to, among other things, remove four current directors of Nano (including Mr. Stern), and its potential consequences on the authority of Nano’s board and management. At this meeting, the Stratasys Board was also updated on the discussions that had been progressing with Desktop Metal.
On March 20, 2023, Murchinson issued a press release announcing that each of its proposals, including the removal of Mr. Stern and three other Nano directors, received support from at least 92% of the votes cast at the Disputed Nano Shareholder Meeting. Murchinson’s press release stated that 56,052,891 of the outstanding Nano ordinary shares cast votes at the Disputed Nano Shareholder Meeting. According to a press release issued by Nano on March 21, 2023, the percentage of outstanding Nano ordinary shares present at the Disputed Nano Shareholder Meeting was less than 13%, excluding shares owned by Murchinson and Anson.
On March 21, 2023, the Stratasys Board held a meeting to further discuss and evaluate the Initial Proposal with its advisors. Members of Stratasys’ management, as well as representatives from J.P. Morgan, Wachtell Lipton and Meitar were present at the meeting. J.P. Morgan presented updates to its financial analysis of the Initial Offer. The legal advisors provided an update on, among other things, the results of the Disputed Nano Shareholder Meeting. Following further discussion, the Stratasys Board discussed and considered J.P. Morgan’s financial analysis of the Initial Proposal and unanimously determined that the Initial Proposal substantially undervalued Stratasys in light of its standalone prospects and was not in the best interests of Stratasys and its shareholders and unanimously rejected the Initial Proposal.
On March 22, 2023, Stratasys issued a press release announcing the Stratasys Board’s unanimous rejection of the Initial Proposal.
On March 24, 2023, Murchinson submitted a statement of claim against Nano with a motion for temporary relief in the Central Region District Court in Lod in Israel (CC 57198-03-23), claiming that Murchinson had the right to convene the Disputed Nano Shareholder Meeting, and requesting a declaration from the court that the decisions taken at the Disputed Nano Shareholder Meeting were valid and must be implemented by Nano.
On March 27, 2023, Nano announced that it had filed a lawsuit in the U.S. District Court for the Southern District of New York against Murchinson, Anson Advisors, Inc., Boothbay Fund Management and their affiliates alleging that the defendants improperly acquired and misused their shareholding interests in Nano.
On March 29, 2023, the Stratasys Board received an unsolicited revised proposal from Nano to acquire the remaining outstanding Stratasys ordinary shares for $19.55 per share in cash (the “Revised Proposal”).
Later on March 29, 2023, Stratasys issued a press release confirming that it had received the Revised Proposal and announcing that the Stratasys Board would review and evaluate the Revised Proposal.
On April 1, 2023, the Stratasys Board held a meeting to discuss and evaluate the Revised Proposal with certain members of Stratasys’ management team and advisors, including J.P. Morgan, Wachtell Lipton, Meitar. Following a comprehensive review and discussion with the members of management and advisors present at the meeting, the Stratasys Board unanimously determined that the Revised Proposal continued to substantially undervalue Stratasys in light of its standalone prospects and was not in the best interests of Stratasys and its shareholders and rejected the Revised Proposal.
On April 3, 2023, Stratasys publicly announced the Stratasys Board’s unanimous rejection of the Revised Proposal. The press release included clarifications with respect to certain misleading statements made by Mr. Stern, including the following:
| ● | “Contrary to statements made by Mr. Stern, Stratasys’ CEO Dr. Yoav Zeif has met with Mr. Stern only once, on March 9, 2023. This meeting was at Mr. Stern’s request. Dr. Zeif did not indicate any support for the proposal and made it clear that Stratasys would respond once the Board’s review of Nano’s proposal was completed. Other than this one meeting, there has been no contact or substantive discussion between Dr. Zeif and Mr. Stern, any directors or any other representatives from either company.” | |
| ● | “Contrary to what was implied by Mr. Stern, Dr. Zeif fully agrees with the Board’s decision.” | |
| ● | “Contrary to claims made by Mr. Stern, Stratasys directors receive the majority of their board compensation (which is approved by the Stratasys shareholders) in Stratasys equity and are aligned with the interests of Stratasys shareholders.” |
In its press release, Stratasys also questioned the composition and authority of Nano’s board and management to submit and follow through on a bona fide acquisition proposal due to the approval by Nano shareholders of the removal of Mr. Stern and three other Nano directors at the Disputed Nano Shareholder Meeting and the pending Israeli court proceeding on the validity of the Disputed Nano Shareholder Meeting.
Later on April 3, 2023, the Stratasys Board received a further revised unsolicited proposal from Nano to acquire the remaining outstanding Stratasys ordinary shares for $20.05 per share in cash (the “Second Revised Proposal,” together with the Initial Proposal and the Revised Proposal, the “Proposals”).
Nano publicly announced the Second Revised Proposal on April 3, 2023 and noted in its press release that the Second Revised Proposal was its “best and final” offer and that it intended to consider other options, including commencing a tender offer, if the Stratasys Board rejected the Second Revised Proposal.
On April 4, 2023, Stratasys issued a press release confirming that it had received the Second Revised Proposal and announcing that the Stratasys Board would review and evaluate the Revised Proposal.
On April 5, 2023, Nano issued a press release announcing that it was preparing a special tender offer for at least 51% of the outstanding Stratasys ordinary shares for $18 per share in cash in the event that the Stratasys Board was unwilling to engage with Nano on the Second Revised Proposal. Nano also stated in the press release its intent to seek relief from an Israeli court providing that the Rights Plan could not be triggered under the Companies Law in response to such special tender offer.
On April 12, 2023, the Stratasys Board held a meeting to discuss and review the Second Revised Proposal and the potential special tender offer with members of Stratasys’ management team and its advisors, including representatives of J.P. Morgan, Wachtell Lipton, Meitar and Joele Frank, Wilkinson Brimmer Katcher (“Joele Frank”). The Board discussed the Second Revised Proposal, the potential special tender offer, and the potential effects of the results of the Disputed Nano Shareholder Meeting. Following consultation with its financial and legal advisors, the Stratasys Board determined that the Second Revised Proposal continued to substantially undervalue Stratasys in light of its standalone prospects and was not in the best interests of Stratasys and its shareholders and unanimously rejected the Second Revised Proposal.
On April 13, 2023, Stratasys publicly announced the Stratasys Board’s rejection of the Second Revised Proposal and reiterated its concerns regarding the uncertainty of the composition and authority of Nano’s board and management, including its authority to submit and follow through on a bona fide acquisition proposal regarding Stratasys.
Also on April 13, 2023, the Stratasys Board received a letter from a representative of Sullivan & Worcester LLP (“Sullivan”), Nano’s legal counsel, on behalf of Nano (the “Sullivan Letter”). In the Sullivan Letter, Nano restated its intent to commence a special tender offer and claimed that the Rights Plan could not be triggered in connection with such special tender offer in accordance with the Companies Law, and that triggering the Rights Plan would represent a stark departure from standard business practices. Nano demanded that the Stratasys Board, by the next business day, April 16, 2023, at 17:00, “approve…that they will act accordingly and as required by their fiduciary duties and the Companies Law, and will avoid any wrongful interference in a case of a Special Tender Offer made by Nano and will take the necessary actions vis-à-vis the Poison Pill, in order to abolish and prevent it from being triggered in this case.”
On April 16, 2023, the District Court for the Central District rendered an interim decision in CC 57198-03-23 Murchinson Ltd., vs. Nano Dimension (April 16, 2023) requiring that two observers be appointed by Murchinson to Nano’s board of directors until a decision is rendered in the proceeding regarding the Disputed Nano Shareholder Meeting, or until the annual general meeting is convened (the “Interim Murchinson Decision”). The court also noted that it was not possible at that time to state that the chances of admitting Murchinson’s complaint were low, and that there were doubts, even prima facie, regarding the legality of Nano’s board composition.
On April 18, 2023, a representative of Meitar delivered a letter to a representative of Sullivan reiterating that the Israeli court had made clear that “Nano is currently acting with a board of directors as to which ‘there is doubt as to its legality’” (quoting the April 16, 2023 decision of the Israeli court) and accordingly, there is at least a reasonable likelihood that the Israeli court will determine that the Disputed Nano Shareholder Meeting was valid. The letter also stated that “under these circumstances it is clearly improper for the members of the board of directors of Nano and certain officers of Nano, acting in what may soon be found to be ultra vires, to plunge Nano, Stratasys, and Stratasys’ shareholders into a hostile take-over bid, rather than wait three to four months, until Nano’s governance is clarified and resolved. It may also be inconsistent with Nano’s board members’ fiduciary duties to Nano and its shareholders.”
On April 18, 2023, Stratasys issued a press release commenting on the illegitimacy and unclear legality of Nano’s ongoing campaign against Stratasys in light of the Interim Murchinson Decision. The press release also highlighted Nano’s omission of the key fact that the court-ordered temporary observers are to be Murchinson’s dissident director candidates.
On April 19, 2023, Nano issued a press release alleging that it has clear and full authority to take actions that are not in the ordinary course of business, including a transaction with Stratasys, and that any claim made to the contrary by Stratasys is false and misleading. The press release also claimed that Nano would continue to proceed with the an all-cash special tender offer at $18.00 per ordinary share of Stratasys.
On April 24, 2023, Nano filed a motion for a preliminary injunction and expedited discovery in its lawsuit in the U.S. District Court for the Southern District of New York against Murchinson, Anson Advisors, Inc., Boothbay Fund Management and their affiliates, arguing that the defendants should be enjoined from (i) buying or selling shares of Nano, and (ii) exercising any shareholder rights in connection with their Nano shares for a period of at least six weeks after the defendants file an updated Schedule 13D disclosure (the “Nano PI Motion”).
On April 25, 2023, Nano filed an application in the District Court in Tel Aviv for an urgent grant of a temporary injunction against Stratasys to prohibit Stratasys from taking any action to prevent or to unlawfully intervene in the Offer (the “Nano Application”). Later that day, the court rejected the application for an urgent grant and stated that Nano’s application would be addressed within the usual timetable. The court scheduled a hearing on the Nano Application to be held on May 15, 2023, and set a deadline of May 11, 2023 for Stratasys to respond.
On April 29, 2023, Mr. Zeif and Mr. Fulop met to further discuss a potential combination between Stratasys and Desktop Metal.
On April 30, 2023, the Stratasys Board held a meeting to discuss the status of the potential tender offer, the Rights Plan, the status of discussions with Desktop Metal, and other matters with members of Stratasys’ management team and its advisors, including representatives of J.P. Morgan, Wachtell Lipton and Meitar. Following consultation with its financial and legal advisors, the Stratasys Board adopted resolutions to provide that, in respect of any tender or exchange offer commenced for Stratasys ordinary shares, the Rights will only become exercisable on the close of business on the tenth day after the public announcement or public disclosure by Stratasys that a person or group has become a beneficial owner of 15% or more of Stratasys ordinary shares pursuant to such tender or exchange offer. Stratasys filed a Report of Foreign Private Issuers on Form 6-K with the SEC on May 1, 2023 announcing the adoption of such resolutions.
On May 1, 2023, Stratasys also filed an application in the District Court in Tel Aviv for a motion for summary dismissal of the Nano Application. On May 2, 2023, the court rejected the application for a motion for summary dismissal, preserving Stratasys’ arguments for the hearing scheduled for May 15, 2023 with respect to the Nano Application.
On May 2, 2023, the U.S. District Court for the Southern District of New York court denied Nano’s request for expedited discovery in connection with the Nano PI Motion. The court scheduled a hearing on the Nano PI Motion for June 23, 2023, five days after the hearing to be held on June 18, 2023 in the Central Region District Court in Lod in Israel concerning the validity of the Disputed Nano Shareholder Meeting.
On May 3, 2023, Stratasys delivered a non-binding indication of interest to Desktop Metal to combine Stratasys and Desktop Metal in a stock-for-stock merger transaction pursuant to which Desktop Metal would be merged into Stratasys (through a merger into a wholly owned subsidiary of Stratasys).
From May 5, 2023 through May 25, 2023, the management of Stratasys, with the assistance of its financial, legal and other advisors, conducted a technology, financial, operational, legal, tax and other due diligence review of Desktop Metal, discussed the potential terms for the combination of Stratasys and Desktop Metal in an all-stock transaction and negotiated the definitive agreement for such transaction. During this period, Stratasys’ management team provided regular updates to the Stratasys Board regarding the negotiation of the Desktop Metal transaction, and the Stratasys Board evaluated the Desktop Metal transaction and the proposed terms thereof with management and its financial, legal and other advisors.
On May 9, 2023, the Supreme Court in Jerusalem denied Nano’s motion for a stay of its obligation under the Interim Murchinson Decision to appoint Murchinson-designated board observers pending resolution of the court proceeding regarding the Disputed Nano Shareholder Meeting.
On May 11, 2023, the Central Region District Court in Lod in Israel issued a decision regarding Nano’s failure to permit observers appointed by Murchinson into its board meetings despite its obligation to do so under the Interim Murchinson Decision. The court held that the non-disclosure agreements Nano required the board observers to execute were unreasonable and ordered Nano to provide a standard non-disclosure agreement so that the observers can attend all board meetings.
Also on May 11, 2023, Stratasys filed its response to the Nano Application with the District Court in Tel Aviv. Stratasys argued that the court should deny the Nano Application. In connection with its response, Stratasys submitted an expert report concerning shareholder rights plans and their acceptance under Delaware law.
On May 14, 2023, Nano filed a motion in the District Court in Tel Aviv seeking to submit an expert report responding to the expert report submitted by Stratasys in connection with its response to the Nano Application. Later on May 14, 2023, the court issued a short order postponing the hearing scheduled for May 15, 2023 on the Nano Application based on its receipt of the expert report submitted by Nano. Stratasys filed a motion arguing that the hearing should not be postponed and that the expert report submitted by Nano was inadmissible and improper as it addressed and offered legal conclusions under Israeli law. The court ruled that the hearing would be held as originally scheduled on May 15, 2023, without ruling on the admissibility of the expert report filed by Nano.
Also on May 14, 2023, the Stratasys Board held a meeting with representatives of J.P. Morgan, Wachtell Lipton and Meitar to discuss the potential combination transaction with Desktop Metal, including the key terms and next steps thereof, the status of the potential tender offer by Nano and the Nano Application, as well as Stratasys’ financial results in the first quarter of 2023.
On May 15, 2023, the District Court in Tel Aviv held a hearing on the Nano Application, during which the court encouraged Nano and Stratasys to engage in mediation, and stated that the parties would reconvene in court on June 12, 2023 if the mediation fails, after all pleadings and witness statements have been filed.
On May 24, 2023, the Stratasys Board met, together with members of Stratasys’ management team and its advisors, including representatives of J.P. Morgan, Wachtell Lipton and Meitar. A representative of Meitar provided an update on developments since the previous meeting of the Stratasys Board and summarized the draft merger agreement between Stratasys and Desktop Metal and the Rights Agreement Amendment, and management and representatives of Meitar gave a summary of the results of the detailed technology, financial, operational, legal, tax and other due diligence review of Desktop Metal. Following this, representatives of J.P. Morgan provided a financial analysis with respect to the potential transaction with Desktop Metal. J.P. Morgan rendered for the benefit of the Stratasys Board its oral opinion, subsequently confirmed in writing, on May 25, 2023 that as of such date based upon and subject to the various assumptions, qualifications, limitations and other matters described in the written opinion, the exchange ratio pursuant to the proposed merger agreement with Desktop Metal was fair from a financial point of view to Stratasys. After discussions, the Stratasys Board unanimously (a) determined that the Desktop Metal Merger Agreement and the transactions contemplated thereby and the Rights Agreement Amendment were fair to, and in the best interests of, Stratasys and its shareholders, (b) approved and declared advisable the Desktop Metal Merger Agreement and the transactions contemplated thereby, (c) resolved to recommend that the holders of Stratasys ordinary shares approve the Desktop Metal Merger Agreement and the transactions contemplated thereby and (d) approved the execution, delivery and performance by Stratasys of the Desktop Metal Merger Agreement and the consummation of the transactions contemplated thereby and the Rights Agreement Amendment.
On May 25, 2023, Stratasys and Desktop entered into the Desktop Metal Merger Agreement and Stratasys entered into the Rights Agreement Amendment. Later that day, Stratasys and Desktop Metal issued a joint press release announcing the execution of the Desktop Metal Merger Agreement.
Later on May 25, 2023, Nano announced the commencement of the Offer.
On May 25, 2023 Stratasys moved to adjourn the filing of its statement of defense by 15 business days, initially scheduled for May 25, 2023, in order for the Stratasys Board to review the Offer and make its recommendation with respect thereto.
Following the commencement of the Offer by Nano, on May 25, 2023, Stratasys issued a press release noting that the Stratasys Board will review the Offer and intends to advise Stratasys shareholders of its formal position regarding the Offer within 10 business days by making available to Stratasys shareholders a Solicitation/Recommendation Statement on Schedule 14D-9, to be filed with the SEC.
On May 28, 2023, Nano submitted an update to the Israel court regarding the Offer and the Desktop Metal Merger Agreement, stating that, although Nano considers the Stratasys press release with respect to the Desktop Metal Merger as well as the Desktop Metal Merger Agreement to be an invalid attempt to impede the Offer, Nano will exhaust the mediation process in hopes to reach an agreement with Stratasys, while reserving Nano’s rights and arguments. Later on May 28, 2023, Nano filed its response opposing Stratasys’ motion for an extension to file its statement of defense in respect of the Nano Application, requesting a default judgement, and alternatively, that Stratasys immediately files its statement of defense.
On May 29, 2023, Stratasys filed a motion requesting leave to reply to Nano’s response submitted on May 28, 2023.
On May 29, 2023, the Stratasys Board held a meeting with certain members of Stratasys’ management team and advisors, including representatives of J.P. Morgan, Meitar, Wachtell Lipton and Joele Frank to discuss the commencement of the Offer. J.P. Morgan rendered for the benefit of the Stratasys Board its oral opinion, subsequently confirmed in writing, on May 29, 2023 that as of such date based upon and subject to the various assumptions, qualifications, limitations and other matters described in such written opinion, the consideration proposed to be paid to the holders (other than Nano and any of its affiliates) of Stratasys ordinary shares pursuant to the Offer was inadequate from a financial point of view to such holders. Following a financial presentation by representatives of J.P. Morgan and a legal presentation by Meitar and Wachtell Lipton, the Stratasys Board discussed and considered the terms of the Offer with members of Stratasys’ management team and advisors. Thereafter, the Stratasys Board unanimously determined that the Offer substantially undervalues Stratasys and is not in the best interests of Stratasys and its shareholders and does not constitute a “Superior Proposal” under the terms of the Desktop Metal Merger Agreement.
On May 30, 2023, Stratasys filed this Statement. That same day, Stratasys issued a press release and letter to its shareholders announcing the Stratasys Board’s recommendation that Stratasys shareholders reject the Offer, not tender any of their Stratasys ordinary shares to Nano pursuant to the Offer and deliver a Notice of Objection against the Offer.
SEC filing segment concludes.
What does the future of 3D printing hold?
What engineering challenges will need to be tackled in the additive manufacturing sector in the coming decade?
To stay up to date with the latest 3D printing news, don’t forget to subscribe to the 3D Printing Industry newsletter or follow us on Twitter, or like our page on Facebook.
While you’re here, why not subscribe to our Youtube channel? Featuring discussion, debriefs, video shorts, and webinar replays. Are you looking for a job in the additive manufacturing industry? Visit 3D Printing Jobs for a selection of roles in the industry.
Featured image shows Desktop Metal 3D printed parts undergoing sintering process. Photo via Desktop Metal.
