Nano Dimension Ltd has officially confirmed the acquisition of Desktop Metal. Under the agreed terms, Nano Dimension will acquire all outstanding shares of Desktop Metal in an all-cash transaction for $5.50 per share, subject to possible downward adjustments to $4.07 per share. The downward adjustment remains in play because at $5.50 per share, the transaction represents a 27.3% premium to Desktop Metal’s closing price and a 20.5% premium to the 30-day VWAP as of July 2, 2024, for total consideration of approximately $183 million, possibly down to $4.07 per share or $135 million in total. More on the same would reveal how the stated acquisition, for starters, will unite two product portfolios with highly complementary capabilities. Here, users can expect to see the birth of a combination which includes each company’s strengths across varied end user-applications, additive manufacturing technologies, and material coverage so to create the broadest product portfolio across metal, electronics, casting, polymer, micro-polymer and ceramics. These strengths cover Nano’s rich history in the context of 3D-printed electronics and high-performance polymer, ceramic, and metal applications, with a robust software platform driven by DeepCube’s deep learning-based AI. In Desktop Metal’s case, the reference touches upon its focus on industrial-volume scale applications of metal and polymer with proprietary materials, software, and sintering solutions.
“Our combination with Desktop Metal is another step in Nano Dimension’s evolution to become the leader in digital manufacturing, with capabilities in mass manufacturing for critical industrial applications. We’re excited to join forces with an excellent group of technology leaders, all of whom share our vision for transforming manufacturing to Digital Industry 4.0. I look forward to working with Ric Fulop and his team to drive value for all our stakeholders, including creating opportunities for our employees as part of a larger, more diversified global innovative company,” said Yoav Stern, Chief Executive Officer at Nano Dimension.
Next up, we must get into how the acquisition will accelerate industry transition to mass production. With the two companies coming together to form a leader in 3D printing innovative solutions, they will effectively drive the transition from prototyping to mainstream tooling and end-use part production. Markedly enough, their combined prowess will make them the first AM provider covering the full gamut of customer needs from prototyping to production across a range of critical and high-performance medical and electronics applications in industrial and high-performance materials. Then, there is the prospect of deepening exposure in key end markets, enhancing customer penetration, and diversifying its base. This prospect brings forth opportunities to cross-sell and grow overall customer base with optimized customer acquisition capabilities and joint go-to-market strategies, including targeting customers with corresponding offerings in shared key markets and across sectors like automotive, aerospace/defense, industrial, medical, and R&D/academia etc. In a more concrete sense, the deal will enable the newly-birthed company to serve customers like Amazon, Caterpillar, Fraunhofer Institute, NASA, Raytheon, REHAU, Tesla, Thermo Fisher Scientific, Toyota, the US Army, and more.
Another detail worth a mention here is how the deal in question will develop a premium, high-margin portfolio of AM & materials solutions with strong recurring revenue potential. This involves a special attention to high-tech solutions that generate premium margins and are supported by an installed machine base of over 8,000 systems, representing significant opportunities for recurring revenue generation from a larger services and consumables offering. Making the financial part even stronger would be a shot at achieving a sustainable financial profile and cash reserves that, on their part, can deliver a path to profitability and strategic initiatives. To put things into context, the deal is likely to generate $30 million in run-rate synergies over the next few years. The said monetary benefit will fit alongside previously announced cost savings from each of the two organizations.
