Filed by Stratasys Ltd.
(Commission File No. 001-35751)
Pursuant to Rule 425 of the Securities Act of 1933
and deemed filed Pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Form F-4 No. 333-272759
Subject Company: Desktop Metal, Inc. (Commission
File No. 001-38835)
The following letter was sent to investors of Stratasys Ltd. by
Yonah Lloyd, Chief Communications Officer of Stratasys Ltd., on June 20, 2023.
SSYS DM Update / 3D Response Investor
Email
Hello,
I am reaching out to make sure you saw two important announcements
that Stratasys made today.
We filed the attached preliminary Form F-4 with the U.S. Securities
and Exchange Commission and issued a press release and a new investor presentation in which we outlined the compelling benefits of our
pending combination with Desktop Metal. Key highlights below:
| ● | Stratasys
believes Desktop Metal has the best and most advanced technology for metal mass production. With low cost per part, a diversified product
offering and superior consistency and reliability, Desktop Metal’s binder jetting offering fulfills key requirements for manufacturing.
With Desktop Metal’s high-growth metals portfolio, Stratasys’ total addressable market for manufacturing is expected to double
by 2027. |
| ● | The
combination is expected to generate more than $1.6 billion of revenue and more than $300 million of EBITDA in 2026 at base case, for
a 20% pro forma EBITDA margin. This growth reflects a top-line CAGR of 19% from 2022 to 2026, compared to an estimated 14% CAGR for standalone
Stratasys over the same period. |
| ● | This
transaction would significantly enhance Stratasys’ offering in the rapidly growing dental vertical. The combination of Desktop
Metal’s chairside and lab dental solutions and Stratasys’ material roadmap would expand Stratasys’ dental addressable
market, including into the $30 billion crown and bridges market, enhancing gross margin and generating additional recurring revenue. |
| ● | Combining
Desktop Metal’s innovative portfolio and pipeline, which includes recent significant developments across metal binder jetting,
binders, furnace and software technologies, with Stratasys’ offerings will give the combined company more than 3,400 active patents
and pending patent applications. This is in addition to one of the largest R&D and engineering teams in the industry, with over 800
scientists and engineers focused on driving innovation. |
| ● | By
bringing together the two most innovative companies in additive manufacturing, we will combine to form the first company covering
the full manufacturing lifecycle with enhanced market access and more than 27,000 industrial customers across industries and applications. |
We also announced that, after careful review and consultation with
its independent financial and legal advisors, the Stratasys Board has unanimously determined that the May 30, 2023 unsolicited non-binding
indicative proposal from 3D Systems Corporation to acquire Stratasys does not constitute a “Superior Proposal” and does not
provide basis upon which to enter into discussions with 3D Systems, pursuant to the terms of our merger agreement with Desktop Metal.
You can learn more by reading both releases here. We also posted the
presentation and an accompanying Q&A on the Investor Relations section of our website and at www.NextGenerationAM.com.
Stratasys will be hosting a pre-recorded audio webcast to discuss these
announcements further today at 8:00 A.M. ET. Details for the call:
| ● | U.S.
toll-free: 877-524-8416 |
| ● | International
dial-in: +1 412-902-1028 |
| ● | Webcast:
https://event.choruscall.com/mediaframe/webcast.html?webcastid=5HNHD1jM |
We
are excited by the significant opportunities our combination with Desktop Metal would unlock. Please let us know if you’re interested
in a call to discuss this news further.
Best,
Yonah
Forward-Looking Statements
This document contains forward-looking statements that involve risks,
uncertainties and assumptions. If the risks or uncertainties ever materialize or the assumptions prove incorrect, the actual results of
Stratasys Ltd. and its consolidated subsidiaries (“Stratasys”) may differ materially from those expressed or implied by such
forward-looking statements and assumptions. All statements other than statements of historical fact are statements that could be deemed
forward-looking statements.
Such forward-looking statements include statements relating to the
proposed transaction between Stratasys and Desktop Metal, Inc. (“Desktop Metal”), including statements regarding the benefits
of the transaction and the anticipated timing of the transaction, and information regarding the businesses of Stratasys and Desktop Metal,
including expectations regarding outlook and all underlying assumptions, Stratasys’ and Desktop Metal’s objectives, plans
and strategies, information relating to operating trends in markets where Stratasys and Desktop Metal operate, statements that contain
projections of results of operations or of financial condition and all other statements other than statements of historical fact that
address activities, events or developments that Stratasys or Desktop Metal intends, expects, projects, believes or anticipates will or
may occur in the future. Such statements are based on management’s beliefs and assumptions made based on information currently available
to management. All statements in this communication, other than statements of historical fact, are forward-looking statements that may
be identified by the use of the words “outlook,” “guidance,” “expects,” “believes,” “anticipates,”
“should,” “estimates,” and similar expressions. These forward-looking statements involve known and unknown risks
and uncertainties, which may cause Stratasys’ or Desktop Metal’s actual results and performance to be materially different
from those expressed or implied in the forward-looking statements. Factors and risks that may impact future results and performance include,
but are not limited to those factors and risks described in Item 3.D “Key Information - Risk Factors”, Item 4 “Information
on the Company”, and Item 5 “Operating and Financial Review and Prospects” in Stratasys’ Annual Report on Form
20-F for the year ended December 31, 2022 and Part 1, Item 1A, “Risk Factors” in Desktop Metal’s Annual Report on Form
10-K for the year ended December 31, 2022, each filed with the Securities and Exchange Commission (the “SEC”), and in other
filings by Stratasys and Desktop Metal with the SEC. These include, but are not limited to: factors relating to the partial tender offer
commenced by Nano Dimension Ltd. (“Nano”), including actions taken by Nano in connection with the offer, actions taken by
Stratasys or its shareholders in respect of the offer and the effects of the offer on Stratasys’ businesses, or other developments
involving Nano, the ultimate outcome of the proposed transaction between Stratasys and Desktop Metal, including the possibility that Stratasys
or Desktop Metal shareholders will reject the proposed transaction; the effect of the announcement of the proposed transaction on the
ability of Stratasys and Desktop Metal to operate their respective businesses and retain and hire key personnel and to maintain favorable
business relationships; the timing of the proposed transaction; the occurrence of any event, change or other circumstance that could give
rise to the termination of the proposed transaction; the ability to satisfy closing conditions to the completion of the proposed transaction
(including any necessary shareholder approvals); other risks related to the completion of the proposed transaction and actions related
thereto; changes in demand for Stratasys’ or Desktop Metal’s products and services; global market, political and economic
conditions, and in the countries in which Stratasys and Desktop Metal operate in particular; government regulations and approvals; the
extent of growth of the 3D printing market generally; the global macro-economic environment, including headwinds caused by inflation,
rising interest rates, unfavorable currency exchange rates and potential recessionary conditions; the impact of shifts in prices or margins
of the products that Stratasys or Desktop Metal sells or services Stratasys or Desktop Metal provides, including due to a shift towards
lower margin products or services; the potential adverse impact that recent global interruptions and delays involving freight carriers
and other third parties may have on Stratasys’ or Desktop Metal’s supply chain and distribution network and consequently,
Stratasys’ or Desktop Metal’s ability to successfully sell both existing and newly-launched 3D printing products; litigation
and regulatory proceedings, including any proceedings that may be instituted against Stratasys or Desktop Metal related to the proposed
transaction; impacts of rapid technological change in the additive manufacturing industry, which requires Stratasys and Desktop Metal
to continue to develop new products and innovations to meet constantly evolving customer demands and which could adversely affect market
adoption of Stratasys’ or Desktop Metal’s products; and disruptions of Stratasys’ or Desktop Metal’s information
technology systems.
These risks, as well as other risks related to the proposed transaction,
are included in the registration statement on Form F-4 and joint proxy statement/prospectus that has been filed with the Securities and
Exchange Commission (“SEC”) in connection with the proposed transaction. While the list of factors presented here is, and
the list of factors presented in the registration statement on Form F-4 are, considered representative, no such list should be considered
to be a complete statement of all potential risks and uncertainties. For additional information about other factors that could cause actual
results to differ materially from those described in the forward-looking statements, please refer to Stratasys’ and Desktop Metal’s
respective periodic reports and other filings with the SEC, including the risk factors identified in Stratasys’ and Desktop Metal’s
Annual Reports on Form 20-F and Form 10-K, respectively, and Stratasys’ Form 6-K reports that published its results for the quarter
ended March 31, 2023, which it furnished to the SEC on May 16, 2023, and Desktop Metal’s most recent Quarterly Reports on Form 10-Q.
The forward-looking statements included in this communication are made only as of the date hereof. Neither Stratasys nor Desktop Metal
undertakes any obligation to update any forward-looking statements to reflect subsequent events or circumstances, except as required by
law.
No Offer or Solicitation
This communication is not intended to and shall not constitute an offer
to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there
be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such jurisdiction. No offering of securities shall be made, except by means of a prospectus meeting the
requirements of Section 10 of the U.S. Securities Act of 1933, as amended.
Important Additional Information
In connection with the proposed transaction, Stratasys filed with the
SEC a registration statement on Form F-4 that includes a joint proxy statement of Stratasys and Desktop Metal and that also constitutes
a prospectus of Stratasys. Each of Stratasys and Desktop Metal may also file other relevant documents with the SEC regarding the proposed
transaction. This document is not a substitute for the joint proxy statement/prospectus or registration statement or any other document
that Stratasys or Desktop Metal may file with the SEC. The registration statement has not yet become effective. After the registration
statement is effective, the definitive joint proxy statement/prospectus will be mailed to shareholders of Stratasys and Desktop Metal.
INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT
DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY
IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors
and security holders will be able to obtain free copies of the registration statement and definitive joint proxy statement/prospectus
and other documents containing important information about Stratasys, Desktop Metal and the proposed transaction, once such documents
are filed with the SEC through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with, or furnished,
to the SEC by Stratasys will be available free of charge on Stratasys’ website at https://investors.stratasys.com/sec-filings. Copies
of the documents filed with the SEC by Desktop Metal will be available free of charge on Desktop Metal’s website at https://ir.desktopmetal.com/sec-filings/all-sec-filings.
This communication is not an offer to purchase or a solicitation of
an offer to sell the ordinary shares of Stratasys. In response to a tender offer commenced by Nano, Stratasys has filed with the Securities
and Exchange Commission a Solicitation/Recommendation Statement on Schedule 14D-9. STRATASYS SHAREHOLDERS ARE ADVISED TO READ STRATASYS’
SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE 14D-9 AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
WHEN THEY BECOME AVAILABLE BEFORE MAKING ANY DECISION WITH RESPECT TO ANY TENDER OFFER BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Stratasys
shareholders may obtain a copy of the Solicitation/Recommendation Statement on Schedule 14D-9, as well as any other documents filed by
Stratasys in connection with the tender offer by Nano or one of its affiliates, free of charge at the SEC’s website at www.sec.gov.
In addition, investors and security holders may obtain free copies of these documents from Stratasys by directing a request to Stratasys
Ltd., 1 Holtzman Street, Science Park, P.O. Box 2496, Rehovot 7612, Israel, Attn: Yonah Lloyd, VP Investor Relations, or by calling +972-74-745-4029.
Participants in the Solicitation
Stratasys, Desktop Metal and certain of their respective directors
and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information
about the directors and executive officers of Stratasys, including a description of their direct or indirect interests, by security holdings
or otherwise, is set forth in Stratasys’ proxy statement for its 2022 Annual General Meeting of Shareholders, which was filed with
the SEC on August 8, 2022, and Stratasys’ Annual Report on Form 20-F for the fiscal year ended December 31, 2022, which was filed
with the SEC on March 3, 2023. Information about the directors and executive officers of Desktop Metal, including a description of their
direct or indirect interests, by security holdings or otherwise, is set forth in Desktop Metal’s proxy statement for its 2023 Annual
Meeting of Stockholders, which was filed with the SEC on April 25, 2023 and Desktop Metal’s Annual Report on Form 10-K for the fiscal
year ended December 31, 2022, which was filed with the SEC on March 1, 2023. Other information regarding the participants in the proxy
solicitation and a description of their direct and indirect interests, by security holdings or otherwise, is contained in the joint proxy
statement/prospectus and other relevant materials filed with the SEC regarding the proposed transaction. Investors should read the joint
proxy statement/prospectus carefully before making any voting or investment decisions. You may obtain free copies of these documents from
Stratasys or Desktop Metal using the sources indicated above.
Use of Non-GAAP Financial Measures
This communication contains certain forward-looking non-GAAP measures,
which are based on internal forecasts and represent management’s best judgment. Reconciliation of such measures to the most directly
comparable GAAP financial measures cannot be furnished without unreasonable efforts due to inherent difficulty in forecasting the amount
and timing of certain adjustments that are necessary for such reconciliations and which may significantly impact our GAAP results. In
particular, sufficient information is not available to calculate certain adjustments that are required to prepare a forward-looking statement
of revenue, margin and EBITDA in accordance with GAAP for fiscal years 2024 and beyond. Stratasys also believes that such reconciliations
would also imply a degree of precision that would be confusing or inappropriate for these forward-looking measures, which are inherently
uncertain. All revenue, margin, EBITDA and other P&L references are non-GAAP unless specified otherwise.
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