Massachusetts-based 3D printer manufacturer Desktop Metal has initiated a strategic review to address its financial liabilities and liquidity challenges, in an update by Nano Dimension.
This move follows Desktop Metal’s acquisition by Nano Dimension for $179.3 million, slightly below the initial valuation of $183 million. The deal came as part of Israeli 3D printer manufacturer Nano Dimension’s broader effort to expand its AM portfolio through targeted acquisitions.
As part of the review, Desktop Metal has appointed Robert Warshauer to its Board of Directors (BoD) and brought on investment bank Piper Sandler & Co. and business consultancy firm FTI Consulting as financial advisers. While no timeline has been set, Nano Dimension has said it will provide more information during its upcoming earnings call in late April.
Financial pressure leading up to the acquisition
The review highlights a prolonged period of financial strain for the Massachusetts-based manufacturer. In its Q2 2024 earnings call, Desktop Metal’s CEO Ric Fulop warned that without a deal in place, the company could be facing what he described as a “fatal prognosis.”
Revenue for that quarter fell 26.9% Y/Y to $38.9 million, and net losses swelled up to $103.4 million. The company reported a gross margin of -83%, impacted by one-time noncash charges tied to amortization and depreciation of assets.
Although the company had been working to align its cost structure with macroeconomic conditions, announcing a $50 million cost-cutting measures and reducing headcount by 20%, those efforts proved insufficient to reverse its declining financial trajectory.
Fulop noted that customers were becoming more hesitant to commit to new deals, further complicating the path to profitability.
During the July 2024 earnings call, Desktop Metal announced it would suspend financial guidance for the remainder of the year. At the time, the company cited the pending acquisition by Nano Dimension as the reason for withdrawing guidance, as it prepared to navigate uncertainties tied to the transaction.
According to Fulop, the company had held merger discussions with ten different organizations over a span of two and a half years.
Ultimately, the leadership concluded that Israeli manufacturer’s offer presented the best route to preserving shareholder value and protecting customer relationships. The acquisition followed after legal dispute over delayed regulatory approvals, and naming Markforged as a defendant in second lawsuit, which resulted in a ruling by Delaware court ordering Nano Dimension to move forward with the transaction.
Assessing next steps under new ownership
Now operating as a subsidiary, Desktop Metal adds its binder jetting and metal AM expertise to Nano Dimension’s broader digital manufacturing portfolio. The combined group is expected to generate over $200 million in revenue in 2024, offering solutions to customers in sectors such as aerospace, defense, automotive, electronics, and medical technology.
The strategic review is expected to assess a range of options to support Desktop Metal’s financial and operational recovery. These may include restructuring certain business units, reallocating internal resources, divesting non-core assets, or exploring additional financing pathways.
Looking ahead, the next phase for Desktop Metal will be shaped not only by the outcome of this review, but also by how it fits into Nano Dimension’s wider growth strategy.
As of April 2, the company reaffirmed its intention to move forward with a pending acquisition of Markforged for $115 million, a move that could further enhance its scale and market presence. The Israeli manufacturer mentioned in a press release that it will outline potential synergies between the two companies in future communications.
For now, the launch of the strategic review marks a pivotal moment for Desktop Metal as it works to stabilize under new ownership and reposition itself within a consolidating AM landscape.
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Featured image shows metal 3D prints from Desktop Metal ExOne S-Max Flex 3D printer. Photo via Desktop Metal.
