SSYS - 3D Systems could increase Stratasys bid though may not be enough - analyst

2023-06-20 15:52:09 ET

3D Systems ( NYSE: DDD ) could increase its bid for Stratasys ( NASDAQ: SSYS ) after the rival 3D printer maker said it wasn't superior to its planned merger with Desktop Metal ( NYSE: DM ), according to a Credit Suisse analyst.

3D Systems could increase the proposed exchange ratio to ~1.7 and raise the full offer to $24/share, though that would still be below the $30/share that Stratasys ( SSYS ) said its combination with Desktop Metals ( DM ) is worth, Credit Suisse analyst Shannon Cross wrote in a note.

Stratasys CEO Yoav Zeif said on a pre-recorded conference call on Tuesday that he expects the purchase of Desktop Metal ( DM ) will deliver $30 a share to Stratasys ( SSYS ) holders, while the sale to 3D Systems ( SSYS ) would be worth about $21 a share.

"We believe a merger with Desktop Metal provides greater opportunity long term, specifically related to scaling of DM’s technology across SSYS’s go-to-market and integration of more mature operations (e.g., SSYS technology is known for its high quality), while a merger with DDD would likely generate higher near-term profitability through elimination of duplicative costs but limited long-term growth potential," Cross wrote in the note.

Credit Suisse's Cross also pointed out that the form F-4 filing on Tuesday disclosed that 3D Systems ( SSYS ) made several attempts to acquire Stratasys ( SSYS ) in 2021, and last year, though Stratasys ultimately walked away. Cross expects that Stratasys ( SSYS ) will continue to pursue the deal with Desktop Metal ( DM ).

3D Systems' ( DDD ) bid also comes after Nano Dimension's ( NASDAQ: NNDM ) $18 per share partial tender offer for Stratasys, which SSYS rejected last month.

More on Desktop Metal, Stratasys and Nano Dimension

• Nano reaffirms $18/share offer, asks removal of majority of Stratasys' directors
• Stratasys likely to reject 3D Systems takeover offer - analyst
• Stratasys purchase of Desktop Metal may be a mistake - analyst
• Tough Times Ahead For Desktop Metal (Rating Downgrade)
• Nano Dimension increased price for Stratasys still undervalues company - analyst
• Nano Dimension bid for Stratasys doesn't have compelling valuation - analyst

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