DM
Desktop Metal, INC
NYSE
DEFM14A: Nano Dimension to Acquire Desktop Metal in $5.50 Per Share Cash Deal
Sentiment:
Definitive Proxy Statement
15 August 2024 7:00 AM
Desktop Metal stockholders will vote on a proposed merger with Nano Dimension, offering $5.50 per share in cash, subject to certain adjustments.
Capital raise
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.
Summary
- Desktop Metal has entered into a merger agreement with Nano Dimension, where Nano will acquire Desktop Metal for $5.50 per share in cash, subject to adjustments.
- The merger consideration is subject to downward adjustments based on transaction expenses, potential borrowings under a bridge loan facility, and agreements relating to severance for certain executive officers and employees of Desktop Metal.
- Desktop Metal estimates adjustments will total $0.44 per share, resulting in an adjusted consideration of $5.06 per share, but this could range from $4.07 to $5.50 depending on the adjustments.
- The Desktop Metal board has unanimously approved the merger agreement and recommends that stockholders vote in favor of the deal.
- A special meeting of Desktop Metal stockholders will be held on October 2, 2024, to vote on the merger proposal.
- The merger is expected to close in the fourth quarter of 2024, subject to regulatory approvals and other customary closing conditions.
- Key stockholders, representing approximately 15% of the voting power, have entered into voting agreements to support the merger.
- Upon completion of the merger, Desktop Metal will become an indirect, wholly-owned subsidiary of Nano Dimension and its stock will be delisted from the NYSE.
Sentiment
Score: 7
Explanation: The document is a formal proxy statement, so the language is generally neutral. However, the board's recommendation to vote in favor of the merger and the potential benefits of the transaction suggest a moderately positive outlook.
Positives
- The merger provides Desktop Metal stockholders with a cash payment for their shares.
- The merger consideration represents a premium over Desktop Metal's recent trading price.
- The Desktop Metal board believes the merger is in the best interests of the company and its stockholders.
- Key stockholders have agreed to support the merger, increasing the likelihood of approval.
Negatives
- The merger consideration is subject to downward adjustments, potentially reducing the final amount received by stockholders.
- If the merger is not completed, Desktop Metal will remain a public company, but its stock price could decline.
- The merger will result in Desktop Metal ceasing to be a publicly traded company.
- Executive officers and directors of Desktop Metal may have interests in the merger that are different from those of stockholders generally.
Risks
- The merger may not be completed if the required regulatory approvals are not obtained.
- The merger agreement may be terminated under certain circumstances, including a superior proposal or a material breach.
- The adjustments to the merger consideration are not known with certainty and could reduce the final amount received by stockholders.
- Litigation relating to the merger could delay or prevent the transaction from closing.
- The restrictions placed on Desktop Metal's business activities during the pendency of the merger could affect its financial performance.
Future Outlook
Desktop Metal expects the merger to close in the fourth quarter of 2024, subject to regulatory approvals and other customary closing conditions.
Management Comments
- The Desktop Metal board has unanimously approved the merger agreement and recommends that stockholders vote in favor of the deal.
Industry Context
The announcement notes that the industrial additive manufacturing sector is undergoing a cyclical downturn, and consolidation is seen as a way for companies to achieve scale and generate cash flow.
Comparison to Industry Standards
- The document references Stratasys Ltd. as a comparable company, noting Desktop Metal's previous merger agreement with them.
- The document references Kornit Digital Ltd., 3D Systems Corporation, Velo3D, Inc., Markforged Holding Corporation, and Prodways Group SA as comparable companies in the additive manufacturing segment.
Stakeholder Impact
- Desktop Metal stockholders will receive $5.50 per share in cash, subject to adjustments.
- Desktop Metal employees will be subject to employment matters outlined in the agreement.
- The merger will result in Desktop Metal becoming a wholly-owned subsidiary of Nano Dimension.
Next Steps
- Desktop Metal will hold a special meeting of stockholders on October 2, 2024, to vote on the merger proposal.
- Desktop Metal and Nano will seek to obtain the required regulatory approvals.
- Desktop Metal and Nano will work to satisfy the other closing conditions outlined in the merger agreement.
Legal Proceedings
- Desktop Metal and members of its board of directors have been named as defendants in a complaint filed by a purported stockholder of the Company.
- The complaint challenges the adequacy of disclosures in the preliminary proxy statement and seeks injunctive relief preventing the parties from proceeding with the Merger, among other remedies.
- Desktop Metal has also received several demand letters from purported stockholders making similar allegations.
Key Dates
- November 17, 2022: Desktop Metal and Nano Dimension entered into a mutual Confidential Disclosure Agreement.
- July 2, 2024: Desktop Metal entered into the Merger Agreement with Nano Dimension and Nano US I, Inc.
- July 2, 2024: Stifel delivered its oral opinion to the Board of Directors of Desktop Metal.
- July 2, 2024: Certain stockholders of Desktop Metal entered into Voting and Support Agreements with Nano Dimension.
- July 24, 2024: Desktop Metal and Nano Dimension each filed a notification and report form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
- July 17, 2024: Nano Dimension filed an application with the Israeli Tax Authority for a ruling exempting it from withholding Israeli tax.
- August 12, 2024: Record date for the special meeting of Desktop Metal stockholders.
- August 13, 2024: The parties submitted a formal notice filing to CFIUS.
- August 15, 2024: Proxy statement dated.
- October 2, 2024: Special meeting of Desktop Metal stockholders to be held.
- January 31, 2025: Original End Date for the Merger Agreement.
- March 31, 2025: Extended End Date for the Merger Agreement, if certain conditions are met.
Keywords
merger, acquisition, Desktop Metal, Nano Dimension, stockholders, merger agreement, cash consideration, regulatory approvals, special meeting, stock
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.