Over the past decade, the 3D printing industry in the United States has undergone substantial growth and also witnessed the bursting of a bubble. Also known as additive manufacturing, 3D printing involves the creation of three-dimensional objects by layering materials gradually. The impact of 3D printing can be seen across a wide range of sectors, such as manufacturing, healthcare, aerospace, automotive, and consumer goods.
The United States has been at the forefront of 3D printing technology, with a robust ecosystem of companies, research institutions, and entrepreneurs driving its development.
Despite expectations of consolidation in the early 2010s following strategic actions by industry leaders such as Stratasys (SSYS) and 3D Systems (DDD), the additive manufacturing industry has witnessed a continuous influx of fresh players. These new entrants have introduced their distinctive and innovative approaches to additive manufacturing.
The 3D Bubble Burst
Back in 2013, Forbes reported the following:
3D printing and related fields in scanning, modeling have seen a phenomenal rise in 2013. There are big questions about 3D printing and if we are witnessing a stock bubble that is soon to burst. Most of these questions and forecasts focus on consumer adoption, or prototyping alone, but the big value in 3D is in printing final parts.
The big appeal with 3D printing was that it would allow for just-in-time manufacturing of custom components. The reality was that the actual process was slow and adoption was not as rapid as expected. The 3D bubble eventually did burst in 2016.
Headquartered in Eden Prairie, Minnesota, United States, Stratasys (SSYS) is a prominent company in the field of 3D printing and additive manufacturing. The company specializes in both industrial and desktop 3D printers, catering to a diverse range of industries including aerospace, automotive, healthcare, consumer goods, education, and more. Stratasys offers a wide variety of 3D printing technologies, including fused deposition modeling (FDM), PolyJet, and selective laser sintering (SLS), each suited to different applications and material requirements.
On May 25th, 2023, Stratasys and Desktop Metal (DM), two major players in the 3D printing industry, announced their merger. The companies reached an agreement for an all-stock deal, valuing the combined entity at USD$1.8 billion. The merger is expected to be completed in the fourth quarter of 2023.
In November 2021, Desktop Metal completed its acquisition of The ExOne Company, reinforcing its leadership in additive manufacturing (AM) for mass production.
Stratasys has been an active contender in our deals in the works list since the beginning of this year. We added Stratasys as a potential deal in the works on March 9, 2023, when Nano Dimension (NNDM), a prominent supplier of Additively Manufactured Electronics, made an official non-binding offer to acquire Stratasys (SSYS) for $18.00 per share in cash. The price after the news of the potential deal came out was $15.28.
After Nano Dimension’s initial offer to acquire Stratasys was rejected by the company’s Board of Directors, Nano Dimension persisted and revised its offer twice. On March 29, 2023, they increased the offer to $19.55, and then further revised it to $20.05 on April 3, 2023. On May 30, 2023, the Stratasys Board came to the determination that the proposals put forth by Nano Dimension undervalued Stratasys and were not in the best interests of the company and its shareholders.
In November 2021, Nano Dimension received a proposal from its largest shareholder to acquire the remaining shares of the company for around $995 million. Following that, on January 30, 2023, Nano Dimension’s Board of Directors implemented a limited duration shareholder rights plan. Seeking transformative acquisitions, the company hired Lazard Ltd as an advisor on February 17, 2023. Murchinson, the largest shareholder with approximately 5.2% of Nano Dimension’s outstanding shares, urged shareholders to support the need for change at an upcoming special meeting on March 20, 2023.
On June 1, 2023, Stratasys made an announcement stating that it received an unsolicited non-binding proposal from 3D Systems Corporation (DDD). According to the proposal, 3D Systems intends to acquire Stratasys for $7.50 in cash and offer 1.2507 newly issued shares of common stock of 3D Systems for each ordinary share of Stratasys. The price after the news of this potential deal came out is $16.21.
According to an analyst from Credit Suisse, Stratasys is likely to decline the cash and stock takeover offer of approximately $18 per share from 3D Systems.
Based on the various offers Stratasys (SSYS) has received, I would not be surprised to see a bidding war emerge and it would be worth tracking this situation closely to see if a definitive merger agreement results either before or after Stratasys completes its Desktop Metal (DM) acquisition.
Merger Arbitrage activity decreased significantly last week with two new deals announced and five deals closing.
You can find all the active deals listed below in our Merger Arbitrage Tool (MAT) which automatically updates itself during market hours.
Total Number of Deals Closed in 2023 | 74 |
Total Number of Deals Not Completed in 2023 | 5 |
Total Number of Pending Deals | |
Cash Deals | 42 |
Stock Deals | 20 |
Stock & Cash Deals | 5 |
Special Conditions | 5 |
Total Number of Pending Deals | 72 |
Aggregate Deal Consideration | $687.46 billion |
New Merger Arbitrage Deals:
Deal Updates:
Approvals:
Hurdles:
Closed Deals:
Weekly Spread Changes:
The table below shows weekly spread changes between May 26, 2023, and June 2, 2023.
Symbol | Quote | Acquiring Company | Acquiring Company Quote | Current Spread | Last Week Spread | Spread Change Weekly | Deal Type |
---|---|---|---|---|---|---|---|
HVBC | 31 | Citizens Financial Services, Inc. (CZFS) | 84.3 | 8.77% | 3.69% | 5.08% | All Stock |
PTRS | 5.47 | LINKBANCORP, Inc. (LNKB) | 5.1 | 7.22% | 4.01% | 3.21% | All Stock |
APGN | 0.56 | Pyxis Oncology, Inc. (PYXS) | 3.33 | 2.58% | -0.01% | 2.59% | All Stock |
SAL | 25.5001 | NBT Bancorp Inc. (NBTB) | 36.73 | 7.31% | 4.78% | 2.53% | All Stock |
MLVF | 15.56 | First Bank (FRBA) | 10.7 | 3.31% | 1.13% | 2.18% | Cash Plus Stock |
SAVE | 15.39 | JetBlue Airways Corporation (JBLU) | 7.18 | 101.43% | 109.46% | -8.03% | All Cash |
SIMO | 64.46 | MaxLinear, Inc. (MXL) | 28.83 | 62.47% | 71.63% | -9.16% | Cash Plus Stock |
DHC | 1.69 | Office Properties Income Trust (OPI) | 7.7 | -33.02% | -10.77% | -22.25% | All Stock |
IRBT | 39.98 | Amazon (AMZN) | 124.25 | 52.58% | 81.87% | -29.29% | All Cash |
INFI | 0.1801 | MEI Pharma, Inc. (MEIP) | 7.5 | 116.55% | 150.28% | -33.73% | All Stock |
Top 10 Merger Arbitrage Deals With The Largest Spreads:
Please do your own due diligence on deals with large spreads. Some of these large spreads might be related to regulatory issues or because of the way the deal is structured. We classify some of these deals as “special situation” deals in our merger arbitrage tool and provide additional details to help with the analysis. There may be unique situations related to special dividends, spinoffs, proration, etc. that need to be accounted for when looking at these spreads.
Symbol | Announced Date | Acquiring Company | Closing Price | Last Price | Closing Date | Profit | Annualized Profit |
---|---|---|---|---|---|---|---|
INFI | 02/23/2023 | MEI Pharma, Inc. (MEIP) | $0.39 | $0.1801 | 06/30/2023 | 116.55% | 1636.13% |
SAVE | 07/28/2022 | JetBlue Airways Corporation (JBLU) | $31.00 | $15.39 | 06/30/2024 | 101.43% | 94.44% |
SIMO | 05/05/2022 | MaxLinear, Inc. (MXL) | $104.73 | $64.46 | 06/30/2023 | 62.47% | 876.94% |
IRBT | 08/05/2022 | Amazon (AMZN) | $61.00 | $39.98 | 08/05/2023 | 52.58% | 309.52% |
TSEM | 02/15/2022 | Intel Corporation (INTC) | $53.00 | $38.36 | 05/15/2023 | 38.16% | -696.51% |
ACI | 10/14/2022 | The Kroger Co. (KR) | $27.25 | $20.5 | 03/31/2024 | 32.93% | 39.93% |
BKI | 05/04/2022 | Intercontinental Exchange, Inc. (ICE) | $75.36 | $57.31 | 08/04/2023 | 31.50% | 188.50% |
ATVI | 01/18/2022 | Microsoft Corporation (MSFT) | $95.00 | $80.50 | 06/30/2023 | 18.01% | 252.87% |
SGEN | 03/13/2023 | Pfizer Inc. (PFE) | $229.00 | $195.38 | 01/31/2024 | 17.21% | 26.06% |
HZNP | 12/12/2022 | Amgen Inc. (AMGN) | $116.50 | $99.93 | 12/15/2023 | 16.58% | 31.20% |
Three new potential Merger Arbitrage deals were added to the ‘Deals In The Works‘ section last week.
Updates
SPAC Business Combination
Disclaimer: I have long positions in Activision Blizzard (ATVI), Spirit Airlines (SAVE) and Tower Semiconductor (TSEM). Please do your own due diligence before buying or selling any securities mentioned in this article. We do not warrant the completeness or accuracy of the content or data provided in this article.