Stratasys receives $1.2B buyout offer, asks shareholders to wait

The largest shareholder of Stratasys made a $1.2 billion offer to buy the remaining shares of the company for $18 a share, but the 3-D printer company's board is calling for patience while it examines the offer.

The offer is from Nano Dimension, which currently owns 14.5% of outstanding shares, said Stratasys, which is based in Eden Prairie and Rehovot, Israel.

The company said late Thursday that its board of directors would carefully consider the offer and told remaining shareholders no action on their part was needed at this time.

The stock market expressed a mixed response to the deal. On Friday shares of Stratasys closed at $15.28, up 9%, while shares of Nano Dimension closed at $2.77 a share, down 11%.

Nano Dimension is a publicly traded company based in Ness Ziona, Israel, which is less than a mile from Stratasys' headquarters in Rehovot. It makes 3-D printers and other additive manufacturing and robotic assembly solutions.

"Together, Nano Dimension and Stratasys can offer an increasingly exciting set of solutions for customers," said Yoav Stern, chief executive of Nano Dimension in a press release announcing the offer.

Earlier this month, Stratasys reported it has lost $2.4 million, or 4 cents a share, in its fourth quarter, an improvement over the net loss of $4.8 million, or 7 cents a share, in the same period a year ago.

The company's outlook for 2023 was for revenue in the range of $620 million to $670 million. Stratasys' market capitalization is approximately $945 million.

Nano Dimension is a much smaller company than Stratasys with 2022 revenue of $43.6 million and a market cap of $800 million. But in its offer letter to Stratasys it said it has cash on hand in order to finance the deal without a third party.

Greg Palm, a senior research analyst with Craig Hallum Capital Group, and other analysts were skeptical of the offer.

"We aren't completely surprised by the move given its ownership position, large cash position (over $1B in cash) and our view that SSYS is an undervalued asset," Palm wrote in a note to clients. "With that said, we don't believe $18/share represents an attractive offer for SSYS shareholders, and we question whether Nano Dimension could complete a transaction this size."

Palm is waiting for a response from Stratasys' board. An announcement from Stratasys that it is seeking strategic alternatives could surface additional bidders, he wrote.

"We have long believed that the stock is highly undervalued and would represent an attractive acquisition for a number of strategic acquirers (to be clear, we don't view Nano Dimension as one of these)," Palm wrote. "We believe meaningful upside could emerge upon a re-rating in shares or a broader strategic alternatives announcement."

Nano Dimension is also in the midst of a proxy battle with one of its own shareholders, which could affect its bid. "We also see challenges ahead that could stall the acquisition, specifically that a large Nano Dimension shareholder opposes the Stratasys bid," said analyst Janice Quek of CFRA in a note to her clients.