Nano Dimension Ltd. (Nasdaq: NNDM) has entered into a definitive agreement to acquire Markforged Holding Corporation (NYSE: MKFG) in an all-cash transaction valued at approximately $115 million. Under the terms of the agreement, Nano Dimension will purchase all outstanding shares of Markforged at $5.00 per share, representing a 71.8% premium over Markforged’s volume-weighted average price (VWAP) as of September 24, 2024.
Strategic Expansion in Additive Manufacturing
The acquisition is a strategic move by Nano Dimension to solidify its position in the additive manufacturing (AM) industry, especially following its recent agreement to acquire Desktop Metal, Inc. (NYSE: DM). With the inclusion of Markforged and Desktop Metal, the combined company’s revenue based on fiscal year 2023 figures is projected to reach $340 million. The company anticipates this consolidation will provide a clear path to profitability.
Yoav Stern, Chief Executive Officer of Nano Dimension, commented, “In combining with Markforged, Nano Dimension is taking bold action in its journey towards becoming a digital manufacturing leader and being a foundational pillar of Industry 4.0. Markforged is an exceptional company with innovative AM materials and solutions for true production. Their prowess is validated by their more than fifteen thousand installed and connected systems in the field with many leading names across key industry verticals. I am excited to work with Shai Terem and his team, who have done an exceptional job developing their cutting-edge solutions. This is all the more substantial when we think about the anticipated closing of our deal with Desktop Metal. We believe the combination of Nano Dimension, Desktop Metal, and Markforged further strengthens our unique opportunity in creating value for our shareholders, customers, and employees as we work to deliver profitable growth, exceptional services, and notable career development opportunities.”
Shai Terem, Chief Executive Officer, President, and member of the board of directors of Markfoged, added, “We’re excited to bring together our pioneering, complementary product portfolios that will further enhance our ability to serve our customers in high-growth industries with a more complete offering of highly innovative solutions used on the factory floor. Not only is our product offering unique, but together we will have the scale and balance sheet strength to become an even more trusted partner to our customers, who are leaders across several industries. We look forward to working with Nano Dimension to join great companies and their devoted teams that can serve our stakeholders to the maximum extent possible.”
Markforged’s Financial Highlights
Markforged reported revenue of $93.8 million in 2023, with a gross margin of 47.4% and a non-GAAP gross margin of 48.6%. In the second quarter of 2024, the company achieved a gross margin of 48.3% and a non-GAAP gross margin of 51.9%, indicating potential for further expansion. As of June 30, 2024, Markforged held $93.9 million in cash and cash equivalents, including $19.1 million in restricted cash reserved for liabilities related to the Continuous Composites lawsuit.
Key Benefits of the Acquisition
Expanded Product Portfolio: The merger will integrate Markforged’s expertise in fused filament fabrication (FFF) for high-performance applications with Nano Dimension’s existing technologies. Customers will have access to a comprehensive range of AM solutions, including binder jetting, digital light processing, and additive inkjet across various materials.
Leadership in Metal Additive Manufacturing: The combined entity will strengthen its position in the metal-AM sector, considered a significant growth driver in the industry. By offering diverse metal fabrication solutions, the company aims to meet specific customer requirements across multiple applications.
Advanced Materials Focus: Emphasizing the importance of materials in producing end-use parts, the merger will enhance capabilities in composite materials, particularly continuous fiber reinforcement. This technology enables polymer-based applications with the strength of metal, opening new avenues in additive manufacturing.
Increased Scale and Efficiency: The consolidation is expected to generate significant cost savings and operational efficiencies. Enhanced research and development capabilities will drive innovation, and the combined resources are projected to produce millions in synergies over the next few years.
Financial Details and Closing Conditions
The transaction is not subject to any financing conditions, as Nano Dimension plans to utilize its cash reserves. Post-closing, the combined company is expected to have approximately $475 million in cash, cash equivalents, and marketable securities.
The deal has received unanimous approval from the boards of directors of both companies. Completion of the transaction is contingent upon customary closing conditions, including regulatory approvals and approval from Markforged’s shareholders. The acquisition is anticipated to close in the first quarter of 2025.
Additional information regarding the transaction will be disclosed in filings with the U.S. Securities and Exchange Commission (SEC).
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Featured image shows Nano Dimension 3D printed electronics. Photo by Michael Petch.
