Belgian software and 3D printing service provider Materialise has announced its intention to commence a registered public offering of four million American Depository Shares (ADSs).
Currently listed on the NASDAQ under the ticker symbol “MTLS”, Materialise is offering the ADSs via an effective shelf registration statement on Form F-3 that the company previously filed with the US Securities and Exchange Commission (SEC).
Each ADS will represent one ordinary share, and the underwriters of the transaction, JP Morgan Securities, will be granted a 30-day option to purchase an additional 600,000 ADSs.
As Materialise has just laid out its intention for the public offering at this point, there is not yet information available on when, or even if, the offer is expected to be completed, nor on the size or terms of the offering.
Why publicly offer shares?
A direct public offering is when a company offers its securities directly to the public in order to raise capital. Raising money independently also enables the company to avoid the restrictions of bank and venture capital funding, as the terms of the offering are solely established by the issuing company.
American Depositary Receipts (ADRs) are issued by American banks or brokers as a form of equity security created to simplify foreign investing for American investors. An ADR typically represents one or more shares of foreign-company stock held by that bank in the home stock market of the foreign company.
For clarity, ADRs allow foreign equities to be traded on US stock exchanges, while an ADS is the actual US dollar-denominated equity share of a foreign-based company available for purchase on an American stock exchange. The entire issuance is called an ADR, and the individual shares are referred to as ADSs – In Materialise’s case, each ADS represents one ordinary share.
A registered public offering is made in accordance with an effective shelf registration statement on Form-F3 – a regulatory form to register securities used by foreign private issuers – which is filed by the company with the SEC.
Terms of Materialise’s public offering
Under its public offering, Materialise is offering four million ADSs, with each representing one ordinary share with no nominal value. According to the firm, the offering is subject to market conditions, and as such there is currently no assurance as to when the offering may be completed, or indeed the actual size or terms of the offering.
JP Morgan is acting as sole representative of the underwriters of the offering, and will also join brokerage and investment firm Stifel, Nicolaus & Company as joint book-running managers of the deal.
The offering will be made by means of a prospectus supplement and an accompanying prospectus which will be filed with the SEC and become available on the SEC’s website at a later date. When available, copies will also be available from JP Morgan and Stifel, Nicolaus & Company.
In the wake of releasing its Q1 2021 financial results in April, Materialise’s shares fell six percent after the company failed to report annual growth across the period. The revenue generated during Q1 was down 1.6 percent on the same period last year, which was the last quarter of normal pre-pandemic trading.
Following the results’ publication, shares in Materialise fell from $32.87 to $30.88, potentially reflecting some unease among investors that the company has been so far unable to return to pre-Covid revenue levels.
Public offerings in the 3D printing sector
Materialise isn’t the only 3D printing firm seeking to raise capital through means of a registered public offering of ADSs and ADRs recently.
In January, German 3D printer manufacturer voxeljet announced it had entered into agreements with its investors for the purchase and sale of 621,170 of its shares in the form of ADRs, worth $10 million, and less than a month later agreed a further $12 million registered direct offering to continue increasing its capital.
Also in January this year, Israeli 3D printed electronics manufacturer Nano Dimension announced the planned sale of $332.5 million worth of shares to investors via a registered direct offering, which was estimated to bring the firm’s total cash raised to $1 billion. The firm raised $35.9 million in a previous direct stock offering last year, which it used for working capital and general corporate and operational purposes.
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Featured image shows Materialise recently launched its new Metal Competence Center in Bremen, Germany. Photo via Materialise.