Combination with Stratasys Presents Significant
Growth Opportunities and Value Creation for Stockholders
Proxy Materials for Special Meeting Mailed to
Stockholders
Desktop Metal Board Unanimously Recommends
Shareholders Vote “FOR” the Merger Proposal
Visit www.NextGenerationAM.com for More
Information
Desktop Metal, Inc. (NYSE: DM), a global leader in additive
manufacturing technologies for mass production, today announced
that it will hold a special meeting at 9:00 a.m., Eastern Time, on
Thursday, September 28, 2023 for consideration and voting on the
previously-announced merger agreement with Stratasys Ltd. (Nasdaq:
SSYS).
Desktop Metal has commenced mailing proxy materials to
stockholders to vote on proposals related to the previously
announced merger with Stratasys. DM stockholders of record at the
close of business on July 31, 2023 will be entitled to vote at the
special meeting.
The Desktop Metal board of directors unanimously recommends that
Desktop Metal stockholders vote "FOR" the merger proposal.
“As we first stated back in May, the combination of Stratasys
and Desktop Metal unites the polymer strengths of Stratasys with
the complementary industrial mass production leadership of Desktop
Metal and our breakthrough technologies, such as binder jetting,”
said Ric Fulop, Founder and CEO of Desktop Metal. “The combined
company will create the first Additive Manufacturing company that
will be at scale — targeted to generate more than $1.6 billion in
revenue and more than $300 million of adjusted EBITDA in 2026 at
base case, for a targeted pro forma margin of 20%. Together, we
expect to be able to offer customers end-to-end solutions from
designing, prototyping, and tooling to mass production and
aftermarket operations across the entire manufacturing lifecycle.
We remain as committed as ever to our goal of ushering in a new era
of AM 2.0, so that it can deliver meaningful sustainability
improvements and once-unthinkable innovations.”
Desktop Metal believes the transaction provides these expected
strategic and financial benefits:
- Category leader at scale
- Transaction establishes first additive manufacturing company to
achieve comprehensive scale across full manufacturing lifecycle —
polymers, metals, ceramics and more
- Combination creates $1.6B+ revenue platform to lead AM industry
into mass production
- Complementary Product Portfolios
- Brings together fully complementary additive manufacturing
platforms with minimal overlap
- Combined company will have a broad product portfolio and
attractive positions across multiple additive manufacturing
technologies and solutions
- More than 50% of pro forma combined company revenue expected to
be derived from end-use-parts manufacturing and mass
production
- Robust Innovation and Technology Expertise
- Combined company will have one of the largest R&D and
engineering teams in the industry with over 800 scientists and
engineers focused on driving innovation across a differentiated
materials library
- Transaction brings together complementary IP portfolios with
more than 3,400 patents and pending patent applications
- Diversifies Customer Base Across Industries and Applications
- Combined company is expected to have one of the largest global
go-to-market networks in 3D printing, backed up by premier customer
support capabilities
- Combination will create significant cross-sell potential for
recognizable brands
- Opportunities for Meaningful Synergies
- The combined company is expected to generate approximately $50
million in additional run rate cost synergies by 20251
- The combined company is expected to generate an additional $50
million in annual run-rate revenue synergies by 2025 from enhanced
market access1
- Robust Financial Profile
- Combined company is targeting $300M+ adjusted EBITDA in 2026,
representing a ~20% margin
- Combined balance sheet will be well-capitalized to drive future
growth
As previously announced on May 25, 2023, subject to the terms
and conditions of the merger agreement, Stratasys and Desktop Metal
will combine in an all-stock transaction, in which Desktop Metal
stockholders will receive 0.123 ordinary shares of Stratasys for
each share of Desktop Metal Class A common stock. The closing of
the transaction is expected to occur in the fourth quarter of 2023,
subject to receipt of required regulatory approvals and
satisfaction or waiver of the other conditions to completion of the
merger.
Desktop Metal stockholders who need assistance in completing the
proxy card, need additional copies of the proxy materials or have
questions regarding the upcoming special meeting may contact
Desktop Metal’s proxy solicitor, D.F. King & Co., Inc., by
phone at (877) 478-5045 or (212) 269-5550 or by email at
DM@dfking.com.
About Desktop Metal
Desktop Metal (NYSE:DM) is driving Additive Manufacturing 2.0, a
new era of on-demand, digital mass production of industrial,
medical, and consumer products. Our innovative 3D printers,
materials, and software deliver the speed, cost, and part quality
required for this transformation. We’re the original inventors and
world leaders of the 3D printing methods we believe will empower
this shift, binder jetting and digital light processing. Today, our
systems print metal, polymer, sand and other ceramics, as well as
foam and recycled wood. Manufacturers use our technology worldwide
to save time and money, reduce waste, increase flexibility, and
produce designs that solve the world’s toughest problems and enable
once-impossible innovations. Learn more about Desktop Metal and our
#TeamDM brands at www.desktopmetal.com.
Use of Non-GAAP Financial Measures
This communication contains non-GAAP financial measures,
including Adjusted EBITDA. In addition to Desktop Metal's results
determined in accordance with GAAP, Desktop Metal's management uses
this non-GAAP financial information to evaluate the Company's
ongoing operations and for internal planning and forecasting
purposes. The presentation of these financial measures is not
intended to be considered in isolation, or as a substitute for, or
superior to, the financial information prepared and presented in
accordance with GAAP. We believe that this nonGAAP financial
information, when taken collectively, may be helpful to investors
in assessing Desktop Metal's operating performance; however,
investors are cautioned that there are material limitations
associated with the use of non-GAAP measures as an analytical tool.
Our computation of these measures, especially Adjusted EBITDA, may
be different from computations used by other companies, limiting
their usefulness for comparative purposes. We compensate for these
limitations by relying primarily on our GAAP results and using
Adjusted EBITDA on a supplemental basis. Investors should not rely
on any single financial measure to evaluate our business. Desktop
Metal has not provided a reconciliation of Adjusted EBITDA targets
to net income because estimates of all of the reconciling items
cannot be provided without unreasonable efforts.
Forward-Looking Statements
This communication contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995.
Such forward-looking statements include statements relating to
the proposed transaction between Stratasys and Desktop Metal,
including statements regarding the benefits of the transaction and
the anticipated timing of the transaction, and information
regarding the businesses of Stratasys and Desktop Metal, including
expectations regarding outlook and all underlying assumptions,
Stratasys’ and Desktop Metal’s objectives, plans and strategies,
information relating to operating trends in markets where Stratasys
and Desktop Metal operate, statements that contain projections of
results of operations or of financial condition and all other
statements other than statements of historical fact that address
activities, events or developments that Stratasys or Desktop Metal
intends, expects, projects, believes or anticipates will or may
occur in the future. Such statements are based on management’s
beliefs and assumptions made based on information currently
available to management. All statements in this communication,
other than statements of historical fact, are forward-looking
statements that may be identified by the use of the words
“outlook,” “guidance,” “expects,” “believes,” “anticipates,”
“should,” “estimates,” and similar expressions. These
forward-looking statements involve known and unknown risks and
uncertainties, which may cause Stratasys’ or Desktop Metal’s actual
results and performance to be materially different from those
expressed or implied in the forward-looking statements. Factors and
risks that may impact future results and performance include, but
are not limited to those factors and risks described in Item 3.D
“Key Information - Risk Factors”, Item 4 “Information on the
Company”, and Item 5 “Operating and Financial Review and Prospects”
in Stratasys’ Annual Report on Form 20-F for the year ended
December 31, 2022 and Part 1, Item 1A, “Risk Factors” in Desktop
Metal’s Annual Report on Form 10-K for the year ended December 31,
2022, each filed with the Securities and Exchange Commission (the
“SEC”), and in other filings by Stratasys and Desktop Metal with
the SEC. These include, but are not limited to: the ultimate
outcome of the proposed transaction between Stratasys and Desktop
Metal, including the possibility that Stratasys or Desktop Metal
shareholders will reject the proposed transaction; the effect of
the announcement of the proposed transaction on the ability of
Stratasys and Desktop Metal to operate their respective businesses
and retain and hire key personnel and to maintain favorable
business relationships; the timing of the proposed transaction; the
occurrence of any event, change or other circumstance that could
give rise to the termination of the proposed transaction; the
ability to satisfy closing conditions to the completion of the
proposed transaction (including any necessary shareholder
approvals); other risks related to the completion of the proposed
transaction and actions related thereto; changes in demand for
Stratasys’ or Desktop Metal’s products and services; global market,
political and economic conditions, and in the countries in which
Stratasys and Desktop Metal operate in particular; government
regulations and approvals; the extent of growth of the 3D printing
market generally; the global macro-economic environment, including
headwinds caused by inflation, rising interest rates, unfavorable
currency exchange rates and potential recessionary conditions; the
impact of shifts in prices or margins of the products that
Stratasys or Desktop Metal sells or services Stratasys or Desktop
Metal provides, including due to a shift towards lower margin
products or services; the potential adverse impact that recent
global interruptions and delays involving freight carriers and
other third parties may have on Stratasys’ or Desktop Metal’s
supply chain and distribution network and consequently, Stratasys’
or Desktop Metal’s ability to successfully sell both existing and
newly-launched 3D printing products; litigation and regulatory
proceedings, including any proceedings that may be instituted
against Stratasys or Desktop Metal related to the proposed
transaction; impacts of rapid technological change in the additive
manufacturing industry, which requires Stratasys and Desktop Metal
to continue to develop new products and innovations to meet
constantly evolving customer demands and which could adversely
affect market adoption of Stratasys’ or Desktop Metal’s products;
and disruptions of Stratasys’ or Desktop Metal’s information
technology systems.
These risks, as well as other risks related to the proposed
transaction, are included in the registration statement on Form F-4
and joint proxy statement/prospectus that were filed with the
Securities and Exchange Commission (“SEC”) in connection with the
proposed transaction. While the list of factors presented here is,
and the list of factors presented in the registration statement on
Form F-4 are, considered representative, no such list should be
considered to be a complete statement of all potential risks and
uncertainties. For additional information about other factors that
could cause actual results to differ materially from those
described in the forward-looking statements, please refer to
Stratasys’ and Desktop Metal’s respective periodic reports and
other filings with the SEC, including the risk factors identified
in Stratasys’ and Desktop Metal’s Annual Reports on Form 20-F and
Form 10-K, respectively, and Stratasys’ Reports of Foreign Private
Issuer on Form 6-K that published its results for the quarter and
six months ended June 30, 2023, which it furnished to the SEC on
August 9, 2023, and Desktop Metal’s most recent Quarterly Reports
on Form 10-Q. The forward-looking statements included in this
communication are made only as of the date hereof. Neither
Stratasys nor Desktop Metal undertakes any obligation to update any
forward-looking statements to reflect subsequent events or
circumstances, except as required by law.
No Offer or Solicitation
This communication is not intended to and shall not constitute
an offer to buy or sell or the solicitation of an offer to buy or
sell any securities, or a solicitation of any vote or approval, nor
shall there be any sale of securities in any jurisdiction in which
such offer, solicitation or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made, except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act.
Important Additional Information About the Transaction and
Where to Find It
In connection with the proposed transaction, Stratasys filed
with the SEC a registration statement on Form F-4 (SEC File No.
333-272759) that includes a joint proxy statement of Stratasys and
Desktop Metal and that also constitutes a prospectus of Stratasys.
Each of Stratasys and Desktop Metal may also file other relevant
documents with the SEC regarding the proposed transaction. The
registration statement was declared effective by the SEC on August
25, 2023. Stratasys and Desktop Metal filed the definitive joint
proxy statement/prospectus with the SEC on August 28, 2023. The
definitive joint proxy statement/prospectus was mailed to
shareholders of Stratasys and stockholders of Desktop Metal on or
around August 28, 2023. This press release is not a substitute for
the definitive joint proxy statement/prospectus or any other
document that Stratasys or Desktop Metal may file with the SEC.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION
STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER
RELEVANT DOCUMENTS THAT MAY BE FILED WITH, OR FURNISHED TO, THE
SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS,
CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE
THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION. Investors and security holders are able to
obtain free copies of the registration statement and definitive
joint proxy statement/prospectus and other documents containing
important information about Stratasys, Desktop Metal and the
proposed transaction through the website maintained by the SEC at
http://www.sec.gov. Copies of the documents filed with, or
furnished to, the SEC by Stratasys are available free of charge on
Stratasys’ website at https://investors.stratasys.com/sec-filings.
Copies of the documents filed with the SEC by Desktop Metal are
available free of charge on Desktop Metal’s website at
https://ir.desktopmetal.com/sec-filings/all-sec-filings.
Participants in the Solicitation
Stratasys, Desktop Metal and certain of their respective
directors and executive officers may be deemed to be participants
in the solicitation of proxies in respect of the proposed
transaction. Information about the directors and executive officers
of Stratasys, including a description of their direct or indirect
interests, by security holdings or otherwise, is set forth in
Stratasys’ proxy statement for its 2023 Annual General Meeting of
Shareholders, which was furnished to the SEC on July 12, 2023, and
Stratasys’ Annual Report on Form 20-F for the fiscal year ended
December 31, 2022, which was filed with the SEC on March 3, 2023.
Information about the directors and executive officers of Desktop
Metal, including a description of their direct or indirect
interests, by security holdings or otherwise, is set forth in
Desktop Metal’s proxy statement for its 2023 Annual Meeting of
Stockholders, which was filed with the SEC on April 25, 2023 and
Desktop Metal’s Annual Report on Form 10-K for the fiscal year
ended December 31, 2022, which was filed with the SEC on March 1,
2023. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect
interests, by security holdings or otherwise, is contained in the
joint proxy statement/prospectus and other relevant materials filed
with the SEC regarding the proposed transaction. Investors should
read the joint proxy statement/prospectus carefully before making
any voting or investment decisions. You may obtain free copies of
these documents from Stratasys or Desktop Metal using the sources
indicated above.
_________________________ 1 Based on management estimates.
Run-rate synergies expected to be realized by CY 2025E.
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version on businesswire.com: https://www.businesswire.com/news/home/20230905846671/en/
Investor Relations Jay Gentzkow (781) 730-2110
jaygentzkow@desktopmetal.com
Media Relations Sarah Webster
sarahwebster@desktopmetal.com (313) 715-6988
Desktop Metal (NYSE:DM)
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