Israeli electronics 3D printer manufacturer Nano Dimension (Nasdaq: NNDM) and Desktop Metal (NYSE: DM) have confirmed that stockholders of Desktop Metal have approved the proposed merger, allowing Nano Dimension to acquire the Massachusetts-based 3D printing company.
Obtained during a special meeting, this approval moves the acquisition process forward, which is anticipated to close by Q4 2024. Of the roughly 33 million shares outstanding, 60% were represented in the vote, with more than 96% cast favoring the merger.
While this secures a key requirement, the transaction still awaits certain regulatory approvals before finalization. Moreover, Desktop Metal will submit the final voting results in a Current Report on Form 8-K to the U.S. Securities and Exchange Commission (SEC).
Ric Fulop, Desktop Metal’s Founder and Chief Executive Officer (CEO), said, “We are pleased that our stockholders, who have supported Desktop Metal over the years, are accepting the recommendation of our board of directors. This industry needs the combination of great products and technologies with a strong balance sheet to become self-sustaining. The agreement to combine with Nano Dimension is the best offer for stockholders to realize value from their current holdings in Desktop Metal. We appreciate the support of our stockholders.”
Consolidation strategy in the AM sector
Nano Dimension’s acquisition of Desktop Metal aligns with its larger goal of consolidating its presence in the AM industry. On September 25, 2024, Nano Dimension announced a deal to acquire Markforged Holding Corporation (NYSE: MKFG) for $115 million in cash, with the deal anticipated to close in early 2025.
These acquisitions of Desktop Metal and Markforged are expected to increase Nano Dimension’s market presence. Combined, they could generate $340 million in revenue based on 2023 performance. The latest Desktop Metal deal is valued at $183 million, translating to $5.50 per share, which reflects a 27.3% premium on the closing stock price as of July 2, 2024.
Some shareholders expressed concerns about the terms, particularly those who bought shares when prices were higher. Desktop Metal’s stock, which traded as high as $20 last year, has dropped significantly, and many investors stand to face losses. Depending on transaction expenses, the merger price could be adjusted down to $4.07 per share, adding to the discontent of shareholders who had hoped for better returns.
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Addressing Desktop Metal’s financial challenges
Desktop Metal has faced significant financial headwinds, reporting a 26.9% year-over-year revenue decline and an operating loss of -$101.3 million in Q2 2024.
CEO Ric Fulop views the merger with Nano Dimension as a critical step to stabilizing the company’s financial position and creating a pathway to profitability. Without this deal, Desktop Metal’s financial pressures could limit its long-term outlook, he said.
Nano Dimension’s acquisition strategy, including the takeovers of both Desktop Metal and Markforged, is intended to create a more comprehensive range of 3D printing technologies for a wider array of industries. The combined company aims to enhance its position in the additive manufacturing sector and transition from a focus on prototyping to mass production capabilities.
Yoav Stern, Nano Dimension’s CEO and member of the Board of Directors, said, “Nano Dimension will stay focused on obtaining the necessary regulatory approvals and finalizing post-merger integration plans which will enable us to close this deal and move the new business forward as soon as possible. The further business combination expected to close soon thereafter with Markforged reinforces the goal to build up a profitable industry leader.”
With regulatory approvals pending and further consolidation on the horizon, Nano Dimension’s acquisition of Desktop Metal marks a significant step toward reshaping the landscape of the AM industry.
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Featured image shows Desktop Metal’s binder jet 3D printing technology. Photo via Desktop Metal.
