DM
Desktop Metal, INC
NYSE
8-K: Nano Dimension to Acquire Desktop Metal in $183 Million Deal, Creating Additive Manufacturing Giant
Sentiment:
Merger Announcement
3 July 2024 7:32 AM
Nano Dimension will acquire Desktop Metal for $5.50 per share in cash, potentially adjusted down to $4.07, creating a combined additive manufacturing leader with a strong financial profile.
Worse than expected
The final purchase price is subject to downward adjustments based on transaction expenses and potential draws on a loan facility, which could reduce the value of the deal for Desktop Metal shareholders.
Delay expected
The closing of the transaction is expected in the fourth quarter of 2024, but is subject to customary closing conditions, including regulatory approvals, which could cause delays.
Capital raise
Nano Dimension has committed to providing Desktop Metal with a $20 million secured loan facility if the closing of the transaction extends into 2025.
The purchase price may be adjusted based on the amount drawn from the loan facility prior to closing.
Summary
- Nano Dimension has agreed to acquire Desktop Metal in an all-cash transaction valued at approximately $183 million, or $5.50 per share, with a potential downward adjustment to $4.07 per share.
- The merger aims to combine the strengths of both companies in additive manufacturing, creating a broader product portfolio across metal, electronics, casting, polymer, micro-polymer, and ceramics.
- The combined company is expected to have a strong financial profile with a 2023 combined revenue of $246 million, 28% of which is recurring revenue.
- The transaction is anticipated to generate over $30 million in run-rate synergies over the next few years, in addition to previously announced cost savings.
- The combined company will have a strong cash position, projected to be approximately $665 million at the $5.50 per share price, or $680 million at the reduced price of $4.07 per share, post-transaction.
Sentiment
Score: 7
Explanation: The document presents a strategic merger with potential benefits, but the downward adjustments to the purchase price and the need for a loan facility introduce some uncertainty. The overall tone is positive, but the financial details temper the enthusiasm.
Positives
- The merger creates a leader in additive manufacturing with a broad product portfolio.
- The combined company will have a strong financial profile and cash reserves.
- The transaction is expected to generate significant cost synergies and revenue growth opportunities.
- The combined company will have a diversified customer base and deeper penetration in key markets.
- The merger will accelerate the industry transition to mass production.
Negatives
- The purchase price is subject to downward adjustments based on transaction expenses and potential draws on a loan facility.
- The transaction is subject to customary closing conditions, including regulatory approvals and shareholder approval.
- The combined company will need to integrate two large organizations and realize the anticipated synergies.
Risks
- The final merger consideration is subject to adjustments based on transaction expenses and potential draws on a loan facility.
- The transaction is subject to closing conditions, including regulatory approvals and shareholder approval, which may not be obtained.
- There is a risk that the combined company may not achieve the anticipated synergies and cost savings.
- The integration of the two companies may present challenges and risks.
- The combined company may face challenges in maintaining customer relationships and market share.
Future Outlook
The combined company is expected to be a leader in digital manufacturing, with a focus on profitable growth, capitalizing on opportunities in mass production, and expanding its customer base in key markets.
Management Comments
- Yoav Stern, Nano Dimensions CEO, stated the merger is another step in Nano Dimensions evolution to become the leader in digital manufacturing.
- Ric Fulop, Desktop Metals CEO, expressed excitement about bringing together complementary product portfolios to better serve customers.
Industry Context
This merger reflects a trend of consolidation in the additive manufacturing industry, as companies seek to expand their product offerings, customer base, and achieve greater scale to drive profitability and growth.
Comparison to Industry Standards
- The combined company will have a broader product portfolio than competitors like Stratasys and 3D Systems, covering metal, electronics, casting, polymer, micro-polymer and ceramics.
- The focus on mass production positions the combined company to compete with established manufacturing processes, unlike many AM companies focused on prototyping.
- The combined company's recurring revenue stream of 28% is higher than many AM companies, indicating a more stable business model.
- The projected cash position of $665 million to $680 million is significant, providing a strong financial base for future growth and acquisitions.
Stakeholder Impact
- Shareholders of Desktop Metal will receive cash for their shares, subject to potential adjustments.
- Employees of both companies may experience changes as a result of the merger.
- Customers of both companies will have access to a broader range of products and services.
- Suppliers of both companies may see changes in their relationships.
Next Steps
- Desktop Metal will file a proxy statement with the SEC.
- Desktop Metal shareholders will vote on the proposed transaction.
- The companies will seek required regulatory approvals.
- The transaction is expected to close in the fourth quarter of 2024.
Key Dates
- July 2, 2024: Date of the merger agreement.
- July 3, 2024: Date of the joint press release announcing the merger.
- January 7, 2025: Earliest date for potential draws on the bridge loan facility.
- January 31, 2025: Original end date for the merger, subject to extension.
- March 31, 2025: Extended end date for the merger if regulatory approvals are pending.
Keywords
additive manufacturing, 3D printing, merger, acquisition, Nano Dimension, Desktop Metal, digital manufacturing, synergies, recurring revenue, mass production
DM
Desktop Metal, INC
NYSE
Sector: TBD
Filings with Classifications
Worse than expected
26 March 2025 5:20 PM
8-K Filing
- Revenue decreased from $189.7 million to $148.8 million year-over-year.
Worse than expected
31 October 2024 7:00 AM
Quarterly Report
- The company's revenue decreased by 15% year-over-year.
- The company reported a net loss of $35.4 million for the quarter and $191.0 million for the first nine months.
- The company's gross margin, while improved, is still relatively low at 9%.
Capital raise
31 October 2024 7:00 AM
Quarterly Report
- The company may need to raise additional capital through arrangements with Nano or from other sources, including equity and debt financings.
- The company has a multi-draw term loan credit facility with Nano for up to $20 million, available after January 7, 2025.
- The company may need to issue additional shares of capital stock or offer debt or other equity securities if the merger is not completed.
Worse than expected
23 September 2024 4:24 PM
Proxy Statement
- The company warns of potential dilutive financings or bankruptcy if the merger fails.
- Desktop Metal expects to run out of cash by the end of the first quarter of 2025 if the merger is not approved.
Capital raise
13 September 2024 4:02 PM
Proxy Statement
- The document mentions that if the merger is not approved, Desktop Metal may need to undertake financings.
- These financings may be severely dilutive to stockholders.
Worse than expected
13 September 2024 4:02 PM
Proxy Statement
- The company expects to run out of cash by the end of the first quarter 2025 if the merger is not approved.
- The company may need to undertake financings that may be severely dilutive to stockholders if the merger is not approved.
- There is a risk of bankruptcy if the merger is not approved.
Worse than expected
6 September 2024 4:38 PM
Proxy Statement
- Desktop Metal expects to run out of cash by the end of the first quarter of 2025 if the merger is not approved.
Capital raise
15 August 2024 7:00 AM
Definitive Proxy Statement
- The merger agreement includes a provision for a multi-draw term loan credit facility (Bridge Loan Facility) from Nano to Desktop Metal, up to $20 million, to provide working capital and liquidity.
Worse than expected
31 July 2024 4:15 PM
Earnings Conference Call Transcript
- The company's Q2 2024 revenue was down compared to the previous year.
- The company's non-GAAP gross margins were down compared to the previous year.
- The company's adjusted EBITDA was negative.
Capital raise
30 July 2024 4:53 PM
Quarterly Report
- The company plans to raise additional capital through a combination of potential options, including equity and debt financings.
- Nano Dimension agreed to provide a multi-draw term loan credit facility in an aggregate principal amount not to exceed $20.0 million, subject to certain conditions.
Worse than expected
30 July 2024 4:53 PM
Quarterly Report
- The company's revenue decreased by 27% compared to the same quarter last year.
- The company's gross margin was -83%, indicating significant losses on sales.
- The company's net loss increased significantly compared to the same quarter last year.
Worse than expected
30 July 2024 4:36 PM
Quarterly Report
- Revenue decreased from $53.3 million to $38.9 million compared to the same quarter last year.
- The company reported a net loss of $(103.4) million.
Worse than expected
30 July 2024 4:35 PM
Quarterly Report
- The company's revenue decreased significantly year-over-year.
- The company reported a substantial net loss, primarily due to one-time non-cash charges.
- The company's GAAP gross margin was negative, indicating poor profitability.
Delay expected
3 July 2024 4:24 PM
Merger Announcement
- The transaction is expected to close at the end of the year, but based on delays, maybe a few months later.
Worse than expected
3 July 2024 4:24 PM
Merger Announcement
- The combined company expects negative cash flow for the next six to eight quarters.
Worse than expected
3 July 2024 7:32 AM
Merger Announcement
- The final purchase price is subject to downward adjustments based on transaction expenses and potential draws on a loan facility, which could reduce the value of the deal for Desktop Metal shareholders.
Capital raise
3 July 2024 7:32 AM
Merger Announcement
- Nano Dimension has committed to providing Desktop Metal with a $20 million secured loan facility if the closing of the transaction extends into 2025.
- The purchase price may be adjusted based on the amount drawn from the loan facility prior to closing.
Delay expected
3 July 2024 7:32 AM
Merger Announcement
- The closing of the transaction is expected in the fourth quarter of 2024, but is subject to customary closing conditions, including regulatory approvals, which could cause delays.
Worse than expected
9 May 2024 6:02 AM
Quarterly Report
- The company's revenue decreased by 2% year-over-year, indicating worse than expected sales performance.
- The company reported a gross loss of $2.2 million, indicating worse than expected profitability.
- The company's net loss of $52.1 million was significant, indicating worse than expected financial results.
Capital raise
9 May 2024 6:02 AM
Quarterly Report
- The company entered into an Open Market Sale Agreement with Cantor Fitzgerald & Co. to sell shares of common stock for an aggregate offering price of up to $75.0 million.
- The company may need to further increase its capital resources by issuing additional shares of its capital stock or offering debt or other equity securities.
Better than expected
9 May 2024 6:00 AM
Quarterly Report
- The company's adjusted EBITDA improved by 44% year-over-year, indicating better than expected cost management.
- Non-GAAP operating expenses decreased for nine consecutive quarters, showing better than expected cost control.
- Cash consumption decreased by 47% year-over-year, demonstrating better than expected cash management.
Capital raise
23 April 2024 7:15 AM
Proxy Statement
- The company may offer common and preferred stock, debt securities, warrants, and units of up to $250.0 million in the aggregate under a shelf registration statement.
- The company may sell shares of its Class A common stock having aggregate sales proceeds of up to $75.0 million pursuant to an at the market offering program.
- The company intends to raise capital through equity or debt financing to fund its current operations.
Worse than expected
23 April 2024 7:15 AM
Proxy Statement
- The company needs to implement a reverse stock split to regain compliance with the NYSE minimum bid price requirement, indicating that the share price has fallen below acceptable levels.
Capital raise
15 March 2024 4:12 PM
Annual Results
- The company may need to further increase its capital resources by issuing additional shares of its capital stock or offering debt or other equity securities.
- The company may not be able to obtain additional financing on terms favorable to it, if at all.
Worse than expected
15 March 2024 4:12 PM
Annual Results
- The company experienced a net loss of $323.3 million in 2023, which is worse than the previous year.
- The company's revenue decreased by 9% in 2023 compared to 2022.
- The company's gross profit decreased by $25.2 million in 2023 compared to 2022.
Better than expected
15 March 2024 7:00 AM
Quarterly Report
- The company's net loss significantly decreased year-over-year, indicating improved financial performance.
- Adjusted EBITDA showed a substantial improvement, reaching the company's strongest quarterly performance to date.
- Non-GAAP gross margins improved significantly year-over-year.
Worse than expected
24 January 2024 8:05 AM
Strategic Business Review
- The company is implementing a significant workforce reduction and restructuring plan, indicating that the current financial performance is worse than expected.
- The company is facing a downturn in the additive manufacturing industry and a softer demand environment, which are contributing to the need for these cost-cutting measures.
Disclaimer: This summary was generated by artificial intelligence and its accuracy is not guaranteed. The information provided here is for general informational purposes only and does not constitute financial advice, recommendation, or endorsement of any kind. It may contain errors or omissions. You should not rely on this information to make financial decisions. Always seek the advice of a qualified financial professional before making any investment or financial decisions. Use of this information is at your own risk.