SSYS - 3D Systems Delivers Enhanced Proposal to Stratasys | Benzinga
- Responds to Stratasys' Requests for Improved Stock Consideration, Enhanced Closing Certainty, Retention of Key Talent and a Role for Stratasys' CEO in Combined Company Management
- Proposal Inclusive of Material Cost Synergies Mutually Agreed Upon by 3D Systems and Stratasys in August 22, 2023 Meeting
- Stratasys Board Rejects Further Discussions Based on Narrow Focus on Current Spot Price of 3D Systems Stock and Moving Ahead with Value Destructive Desktop Metal Merger
ROCK HILL, S.C., Sept. 11, 2023 (GLOBE NEWSWIRE) -- 3D Systems (NYSE:DDD) today announced the delivery of a revised proposal to combine with Stratasys Ltd. (NASDAQ:SSYS). Each Stratasys share will convert into $7.00 in cash and ownership of 46% of the aggregate shares of the combined company (representing a 1.6387 exchange ratio based on the last disclosed Stratasys share count). 3D Systems believes this consideration mix is worth more than $27 per share to Stratasys shareholders inclusive of synergies.1
The revised offer results from discussions between the two companies and addresses feedback provided by Stratasys during an in-person meeting between directors of both companies on August 22, 2023. Stratasys has responded to this proposal by acknowledging that its diligence has confirmed material cost synergies arising from a combination that would translate into hundreds of millions of dollars of shareholder value, but concluded that the current spot price of 3D Systems shares renders the proposal inadequate. In addition, Stratasys has informed 3D Systems that, despite 3D Systems' good faith efforts to reach a negotiated transaction for the benefit of all shareholders, Stratasys' board of directors continues to support the Desktop Metal merger as its preferred alternative and that the Stratasys board is not interested in any further discussions with or proposals from 3D Systems about a combination.
President and CEO Dr. Jeffrey Graves stated, "We listened to shareholder feedback and made a strong effort to reach a friendly transaction but it seems there is no price that would satisfy the Stratasys Board. Shareholders of Stratasys have seen their board turn down offer after offer, watching only the consistent destruction of value in the meantime. The latest game appears to be an attempt to ‘run out the clock' on supposed discussions with us, while always moving ahead with the massively value-destructive merger with Desktop Metal. We are confident that shareholders will support our combination and send an unequivocal message to the Stratasys board that they can no longer protect themselves while fiddling away shareholder value." The full terms of 3D Systems' revised proposal to Stratasys were included in a merger agreement, together with a full set of disclosure schedules, delivered to Stratasys on September 6, 2023, that built upon the terms of the binding merger agreement submitted on July 13, 2023 and filed publicly with the SEC. Updates to the July 13 offer are:
- Superior Consideration: In response to Stratasys' request for a consideration mix consisting of less cash and a higher percentage of stock, in large part in order to permit Stratasys shareholders to participate in more of the upside of the agreed-upon synergies, 3D Systems proposes that Stratasys shareholders receive, for each of their shares, $7.00 in cash and 46% ownership (an exchange ratio of 1.6387 based on the last share count disclosure) of the combined company as compared to 44% in 3D Systems' July 13 offer.
- Certainty of Closing: The revised offer includes a reverse termination fee of $50 million payable to Stratasys in the event the merger does not receive required antitrust clearances, demonstrating 3D Systems' confidence in obtaining all such clearances.
- Retention of Key Talent: 3D Systems recognizes the critical role that management, employees and other key contributors of both Stratasys and 3D Systems will play in driving value creation at the combined company and proposes to create a $10 million retention program, to be allocated among employees of each company on an inverse basis to the projected pro forma ownership by their respective shareholders.
- Management: 3D Systems responded affirmatively to Stratasys' request for a key leadership role for Stratasys' current Chief Executive Officer with the combined company to help ensure a smooth integration of the two companies ...