3D Systems, the No. 2 manufacturer of additive manufacturing systems (based on 2022 revenues), has offered $1.2 billion to buy Stratasys, its larger rival and chief competitor. The news comes days after Stratasys, on May 25, announced an agreement to purchase Desktop Metal, another additive company that also sits in the Top 10 per annual earnings.
European and domestic regulators will likely have a field day figuring out the potential ramifications of any merger between 3D Systems and Stratasys, as the Stratasys/Desktop Metal deal may already be switching on regulators' radar.
3D Systems proposed to combine with Stratasys via a cash and stock merger that would result in Stratasys shareholders owning 40% of the combined company and receiving around $540 million in cash. The company's pitch for the value of the merger revolves largely around scale—the same, chief argument Stratsys forwarded as the value of its purchase of Desktop Metal.
Stratsys late Thursday acknowledged the unsolicited, non-binding 3D Systems proposal.
"The Stratasys board has not made any determination as to the 3D Systems proposal within the framework contemplated by the Desktop Metal merger agreement, which remains in effect, nor changed its unanimous approval, recommendation and declaration of advisability of the agreed transaction with Desktop Metal," reads the company's statement on the 3D System proposal.
“We are at an inflection point in our industry, and we see significant upside for our shareholders and all stakeholders by capturing the benefits of scale, enhancing investment in innovation and delivering long-term profitable growth. We know and respect the Stratasys business and the people who make it a success around the world. We are committed to creating a combined platform that enables these two great companies to serve our global customers and lead the industry with innovative technology offerings," says Dr. Jeffrey Graves, President and CEO of 3D Systems.
This is a developing story. Expect updates throughout the day.