Stratasys Ltd. (SSYS) and Desktop Metal, Inc. (DM) announced Thursday that they have entered into a definitive agreement to combine in an all-stock transaction valued at around $1.8 billion.
Under the deal terms, each Desktop Metal stockholders will receive 0.123 ordinary shares of Stratasys. This represents a value of approximately $1.88 per share of Desktop Metal Class A common stock based on the closing price of a Stratasys ordinary share of $15.26 on May 23.
The agreement has been unanimously approved by the Boards of Directors of both companies, and the deal is expected to close in the fourth quarter of 2023.
Following the deal closure, existing Stratasys shareholders will own around 59% of the combined company, and legacy Desktop Metal stockholders will own around 41% of the combined company.
Yoav Zeif, CEO of Stratasys, will lead the combined company as Chief Executive Officer together with Ric Fulop, Co-founder, Chairman and CEO of Desktop Metal as Chairman of the Board.
The combined company’s Board of Directors will be comprised of 11 members, five of whom will be selected by Stratasys, and five by Desktop Metal, plus Zeif as CEO.
The companies said the transaction unites the polymer strengths of Stratasys with the complementary industrial mass production leadership of Desktop Metal’s brands.
Stratasys and Desktop Metal are expected to generate $1.1 billion in 2025 revenue, with significant upside potential in a total addressable market of more than $100 billion by 2032.
Both Stratasys and Desktop Metal also reaffirmed their respective guidances.
In pre-market activity on Nasdaq, Stratasys shares were losing around 2 percent to trade at $14.59.
In pre-market activity on the NYSE, Desktop Metal shares were gaining 6.3 percent.
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