Israeli 3D-printing firm Stratasys said it had received a counterbid from US rival 3D Systems after entering into a $1.8 billion merger agreement with Desktop Metal in late May.
As part of a cash and share merger proposal announced on Friday, 3D Systems is offering to buy out each Stratasys share for $7.50 in cash and 1.2507 of its newly issued common stock. That would make the offer equal to about $25 per Stratasys share, 3D Systems said in a statement. Stratasys shares rose more than 11% on Friday to $16.21.
Following the proposed merger with 3D Systems, Stratasys shareholders would own 40% of the combined company and receive about $540 million in cash.
Nasdaq-traded Stratasys, with offices in Rehovot and Minnesota, is a maker of industrial 3D printers for polymer manufacturing and operates in areas such as consumer products, healthcare, aerospace and the automotive industry. The firm’s clients include General Motors, Google, Tesla, Amazon, and Medtronic.
The global market for additive manufacturing, or 3D-printing, was an estimated $13.8 billion in 2021 and is forecast to reach about $76 billion by 2030, according to a 2022 market research report by Grand View Research.
“We are at an inflection point in our industry, and we see significant upside for our shareholders and all stakeholders by capturing the benefits of scale, enhancing investment in innovation and delivering long-term profitable growth,” said 3D Systems resident and CEO Jeffrey Graves.
3D Systems said it expects to make $100 million in cost synergies as a result of a potential combination of the two firms. For the full year 2024, the combined company would generate an estimated $1.3 billion in revenue, turning it into the biggest pure-play additive manufacturing company in the industry, the US printing firm said.
3D Systems is entering the race for the Israeli 3D-printing firm after Stratasys on May 25 announced a merger agreement with US firm Desktop Metal, in an all-share deal valued at $1.8 billion. Desktop Metal designs and markets 3D systems to print metal, polymer, sand and other ceramics, as well as foam and recycled wood.
A combination of Stratasys and Desktop Metal is expected to generate $1.1 billion in revenue by 2025 and aims to create a leading company in the fragmented 3D-printing industry, which is estimated to expand to more than $100 billion by 2032.
Stratasys said its board of directors will “carefully review” the proposal by 3D Systems, as the merger deal with Desktop Metal is still subject to certain conditions, including the approval of both Stratasys’s and Desktop Metal’s shareholders, as well as governmental and regulatory authorities.
Last week, Stratasys announced that its board unanimously rejected a takeover offer by its largest shareholder Nano Dimension. The $18 per share cash offer “substantially undervalues the company and is not in the best interests of shareholders,” Stratasys said.
At the end of May, Israel’s XJet, which develops inkjet technology for 3D-printing of small metal and ceramic parts, announced that it was seeking to raise about $10 million from an initial public offering (IPO) of shares on the Nasdaq.