Nano Dimension Ltd. (
Nasdaq: NNDM, “Nano
Dimension”, “Nano” or the “Company”), a leading supplier of
Additively
Manufactured
Electronics (“AME”) and multi-dimensional polymer,
metal & ceramic
Additive
Manufacturing (“AM”) 3D printers, which owns
approximately 14.1% of Stratasys Ltd. (Nasdaq: SSYS) (“Stratasys”),
once again sets the record straight for Stratasys shareholders and
refutes Stratasys’ brazenly misguided commentary.
Stratasys Shareholders Have an Important
Decision to Make and the Choice is Clear – Elect Nano’s Highly
Qualified Nominees to Replace Stratasys’ Entrenched Board of
Directors
Stratasys shareholders have the opportunity to
replace up to seven of the Stratasys Board’s self-interested
directors with Nano’s nominees who are committed to generating
value for all Stratasys shareholders. Stratasys had to be
“reminded” by Nano about its legal requirement to allow
shareholders to vote for directors individually, versus voting for
either Stratasys’ entire slate or Nano’s entire slate. Hence,
Nano’s and Stratasys’ director candidates are now
permitted to stand for election individually at the upcoming
Stratasys Annual General Meeting on August 8th, 2023.
While Stratasys claims its candidates are highly
qualified and independent, it is clear that they are in fact an
entrenched group with an average tenure on the Stratasys Board of
12-15 years, over which time they have overseen significant value
destruction.
Nano’s nominees are highly qualified:
- Ze’ev Holtzman, a brilliant banker and
investor for 45 years, will be an independent
director who knows Stratasys from his time as a director
on the Stratasys Board in 2021.
- Zivi Nedivi will bring 30 years’ experience as
CEO & Board member of several public technology
companies with revenue of $50M-$400M, as well as CEO of a
multi-billion New York City based hedge fund.
- Hanan Gino has prodigious experience as a CEO at $500M
international technology corporations.
- Tomer Pinchas brings more than 18 years of global
experience in finance, M&A, CFO of multiple technology
companies including PwC in New York.
- Nick Geddes Founder & 15 years CEO of the
Cambridge, UK based, renowned industrial inkjet company
Global Inkjet Systems.
- Yael Sandler brings extensive CFO experience for public
and private companies as well as positions at KPMG.
Yoav Stern is a
seasoned executive with a proven 30-year track record of
leadership over three decades, having served 6 times as CEO and
Chairman in the United States and globally for companies with
revenue of $50M-$400M and operations encompassing
multi-disciplinary technologies across 3-4 continents.
Nano fully recognizes that the Board
should be comprised of a majority of independent directors
and, following a successful replacement of the current Stratasys
directors with Nano’s director nominees, intends to take
steps to appoint independent directors to represent
Stratasys shareholders’ interests for the long term, at which time
Nano Dimension’s nominees would cycle off the Board such
that a majority of the Board would be independent over
time.
Nano Dimension’s director nominees are intended
as an interim but urgently needed solution to prevent
further value destruction by the current Stratasys
Board.
Do not be fooled by Stratasys’ false claims that
Nano is seeking to seize control of Stratasys without paying a
premium, or that Stratasys shareholders risk getting “trapped” with
shares that are not able to be tendered. These are the
facts:
- Nano paid $170 million to Stratasys shareholders when it
purchased 14.1% of the company in the open market.
- Nano’s $25 per share, all-cash special tender
offer will deliver a significant and immediate
premium to Stratasys shareholders.
- On August 1st, 2023, the day following expiration of the
special tender offer (unless further extended), Nano will announce
whether the conditions for the special tender offer have been met
(or otherwise waived).
- If it is at least
31.9%-36.9%, Nano will have met the
minimum condition to accept all tendered shares.
- Shareholders who have not responded to the special tender
offer, previously objected, or previously tendered but properly
withdrew their shares will have four days after the
expiration date of the special tender offer to tender their shares
in the special tender offer.
In addition,
Nano has declared its intention to buy the rest of Stratasys
shares – in the open market, if possible, or eventually in
a tender offer, as soon as practical and legally permitted – or to
pursue a negotiated combination of Stratasys with 3D Systems, Inc.
(NYSE: DDD) (“3D Systems”) or other candidates for industry
consolidation.
The choice is
clear, and the value is certain: Receive $25 per
share in cash from Nano in the special tender offer or
hold out for uncertain and inferior value with the proposed
transaction with Desktop Metal, Inc. (NYSE: DM) (“Desktop Metal”)
or 3D Systems.
- With 3D Systems shares currently trading at approximately $9
per share, the currently proposed transaction with Stratasys has a
value of less than $21.5 per share, and
only half of it is in cash.
- The ill-conceived and dilutive transaction
with Desktop Metal Inc. presents significant uncertainty and
tremendous risk of depletion of all Stratasys’
cash, as both Stratasys and Desktop Metal continue to lose
cash on a quarterly basis.
At Nano, we stand by our track record, performance and
Board governance:
- Significant Revenue Generation
and Growth Year-Over-Year
Year |
Revenue |
2020 |
~$5 million |
2021 |
~$10 million |
2022 |
~$43.4 million |
2023 |
~$60 million run rate (based on 1H/2023) |
- Organic Growth of 50% from Third
Quarter 2022 to First Quarter 2023
- Adjusted Gross Margin increased
47% as of First Quarter 2023
- Seven Integrated product lines all selling to similar
vertical markets as Stratasys
- AME machines (over 45 customers, including 5-7
Western Armies, 4-5 Western Secret Services, 5 largest Defense
Contractors, Space Agencies customers and more civilian
customers)
- AM ceramics and metal (DLP) machines (over dozens
of machines sold)
- AM micro-mechanic polymers (DLP) machines (Machines
sold to Western Secret Services and Part Manufacturers).
- Additive Electronic Assembly Machines (thousands of
machines sold)
- AI - Deep Learning Quality Algorithm Engines for Nano’s AM
and other companies' industrial applications.
- Ink Systems and Software for 2D-3D printing
sub-systems
- Materials development and production for Additive
electronics
- Governance of Nano’s Board that Protects Shareholder
Interests
- 9 Directors, 7 of whom are independent.
- 7 out of the 7 independent directors met each other for the
first time while serving on Nano’s Board.
All directors bring
deep, relevant experience, and strong views to the Board, which
align with and support Nano’s focus on growth, while taking its
portfolio of proprietary manufacturing solutions to the next
level.
In contrast, Stratasys’ Board is deeply
entrenched and acting out of self-interest. The actions of
the current Stratasys Board of Directors have raised significant
concerns about their own governance practices and lack of
commitment to shareholder interests:
- 6 of the 8 directors have spent an alarmingly long time
together on the Board, suggesting a lack of new perspectives and
fresh ideas.
- The Stratasys Board has demonstrated a blatant disregard for
shareholders’ interests and resistance to change. While a new
director has joined the Board in 2020, he was ousted barely a year
later in 2021 following some self-serving corporate governance
maneuvers geared at maintaining the underperforming status quo and
the Board’s grip on power.
- The Stratasys Board has lined their own pockets while
overseeing poor performance, indulging themselves with exorbitant
salaries and annual equity grants, cumulatively equaling
approximately $1,820,0001 in FY 2022 for 8
directors, not including meeting fees, (for approximately
10-20 meetings per annum), and travel & entertainment
expense.
- Furthermore, the interconnections between board members raise
independence concerns, resulting from directors having other mutual
commercial interests which are not related to their fiduciary
duties at Stratasys.
- Presently, two Stratasys directors, Dov Ofer
and David Reis, both sit on the board of Scodix
Ltd. In the past, Adina Shorr served as CEO of
Scodix Ltd. during Dov Ofer’s directorship.
- These overlapping interests raise questions about objectivity
of the directors, further eroding trust in their
decision-making.
Adding to their questionable track record, the
Board's decision-making has been marred by destructive
acquisitions. They have made poor, value-destructive and
money-wasting acquisitions and/or failed to
integrate the acquisitions of Origin, Ultimaker, SolidConcepts, and
MakerBot, followed by the questionable divestment and
reinvestment in MakerBot. These actions demonstrate a lack of
strategic foresight and a failure to prioritize long-term value
creation for the company and its shareholders.
These facts paint a troubling picture of
the Stratasys Board of Directors. Their long tenure,
rejection of new voices, self-serving compensation practices, poor
acquisition decisions, and intertwined relationships raise serious
doubts about their ability to act in the best interests of
Stratasys and its shareholders.
Below are a few examples of the questionable track
records that warrant the replacement of board members of
Stratasys:
*Yair Seroussi – was
formerly the Chairman of a large Israeli bank but had to resign
allegedly because of allegations that he had failed to report a
sexual assault by the CEO of a female employee2. Seroussi hid the
information from the bank’s board of directors and from the Bank of
Israel, colluding with the CEO.
Once again scheming with the same CEO, Seroussi
was also found guilty of aiding and abetting tax-evasion for U.S.
citizens – in exchange for millions of dollars of
kickbacks. Under his leadership, the bank had to cough up a
fine of almost $900 million3 to U.S. authorities,
in addition to being forced to pay significant personal fines for
his crimes. An investigation committee disclosed that, as
Chairman, Seroussi and his friend the CEO behaved unreasonably and
personally received millions of dollars as bonuses on account of
tax evasion schemes they led though the bank’s branch in
Switzerland.
*Dov Ofer (Chairman) – was the
former CEO of Lumenis Ltd. Dov Ofer’s tenure was marked by a period
of stagnation. After his appointment, the company experienced a
decrease in revenue4. After continued underperformance under Ofer’s
leadership, the Lumenis board opted to hold him accountable,
removing Ofer as CEO and bringing in a new chief executive
officer.
This change proved that the prior issue was the
failing management by Ofer, not the company. The new CEO was able
to revitalize the company's growth trajectory. Lumenis Ltd.
experienced a remarkable turnaround recovery following Dov Ofer’s
tenure as CEO, with revenue increasing by an impressive 51% from
$265 million in 2013 to $400 million in 20185.The stark contrast
between the performance of Lumenis Ltd. during Ofer's tenure and
the subsequent growth achieved under the new CEO highlights the
impact of leadership on the company's success. The decision to
replace Ofer ultimately proved to be a strategic move that
revitalized the company and set it on a path of substantial
growth.
*David Reis - was the
former CEO of Stratasys until his resignation in 2016. Under Reis'
leadership, investors in Stratasys have experienced a challenging
value-destructing ride over several years. Sales and Stratasys
share prices have both plunged amid a $1.4 billion loss last
year.
The company’s acquisition of desktop printer
manufacturer, MakerBot, in 2013 for over $490M6 (approx. $16M in
revenue per annum at prior year)7 was a failure. MakerBot has
suffered greatly, replacing leadership three times, producing
a problematic 3D printer component, and leaving Stratasys with such
significant losses that Reis’s Stratasys became part of a class
action lawsuit. The consumer brand laid off almost 40% of
its workforce and shut down its retail shops. Meanwhile, the value
of Stratasys shares collapsed over the course of the two years
post-acquisition, from record highs of almost $137 per share in
2013 to around $23 per share by the end of 20158. The lawsuit
alleges that the drop in Stratasys shares in 2015 was caused by
fraudulent practices in the MakerBot-related business9
MakerBot was eventually spun out 9 years later
after major losses and cash burn. Reis has left a trail of massive
write-downs yet continued to be a member of the board and Executive
Committee, which is comprised of just three people, together with
Dov Ofer
Another problem facing Stratasys under Reis that
garnered much attention was a U.S. Securities and Exchange
Commission investigation. The SEC’s enforcement decision approached
the company in early 201610 on the matter, which was briefly
mentioned in Stratasys’ latest 20-F filing with the SEC.
Interestingly, while the courts decided that
Stratasys was not to blame for securities fraud, it stated that
under Reis, Stratasys used “...hyperbole and exaggeration… mere
puffery…vague and such obvious hyperbole… Stratasys’s
statements…are vague and unreliable”11
Stratasys history of misleading
disclosures raises serious questions about Stratasys’ present
statements: The same executives
accountable for misleading their shareholders are still directors
at the helm: Reis has been a Director since 2013,
and as recently as 2018-2019 also served as a member of the
“executive committee” together with Mr. Ofer.
According to industry pundits, Reis’ resignation
was certainly precipitated by the 30% decrease in the share price
and the mounting pressure from disgruntled shareholders.
- *Ziva Patir – Was the former
CEO of the Standards Institution of Israel. During her tenure the
Israeli Ministry of Finance demanded that she return tens of
thousands of shekels, which she allegedly received in an improper
manner from the Institute12. Additionally, an inspection conducted
by the Capital Markets Division of the Ministry of Finance revealed
a misallocation of funds under the management of Ziva Patir,
resulting in employees having to return a substantial sum of 3
million shekels13. Under Patir’s management, the Standards
Institution of Israel was characterized by a slow and bureaucratic
nature, leading to inefficiencies and financial losses.
Additionally, there were criticisms regarding the allocation of
pensions, as well as conflicts with the labor union14.
- *Scott Crump – A few days after reporting
$1.37 billion loss in 2015, it was discovered that the company paid
$1.44 million15 to the present director Mr. Scott
Crump, founder of Stratasys, and to three other executives
an additional $5.4 million in compensation16.
*Adina Shorr- Yet another
ex-CEO of Stratasys (Objet), who stayed entrenched and highly paid
on the board for the last 5 years. She also has a checkered record
insomuch as leading, as a CEO, value destructing
activities: She was the former CEO of Lucid-Logix, which
had raised $40 million promising attractive returns for its
investors. Ms. Shorr raised additional capital, only to close the
company and terminate all employees with zero return to its
shareholders (Giza and others)17.
*Yoav Zeif is the current
Stratasys CEO – an unproven CEO having served before only as a
consultant and in business development roles. Moreover, under his
leadership, Stratasys is being accused18 by the former founders and
shareholders of Origin, a company Stratasys purchased under his
leadership for $97M19 (estimate $5M-$15M in previous year’s annual
revenue when acquired in December 2020) for not fulfilling its
obligations and personal commitments to pay them their promised
earnout as per agreement. All founders and key employees of Origin
subsequently ended up leaving Stratasys.
Zeif has also led the
value-destructing move of spinning-off David Reis’s 2013
failure of MakerBot. Zeif paid approximately $47M in cash just “to
arrange” for Stratasys to own less than 50%20 of MakerBot,
practically selling over 50% of MakerBot by adding money rather
than receiving money.
Bottom line: A Personal
Message from NANO’s Chairman & CEO to Stratasys
Shareholders:“Dear shareholders of Stratasys,Contrary to
so many inaccurate, not to call those misleading, News Releases and
formal proxy materials from entities involved in our attempt to
create a partnership with Stratasys, to the best as my knowledge
and influence, our news releases, filings and
announcements, video or text, are and will always be truthful,
accurate and honestly disclose our intentions, in general as Nano’s
culture and etiquette commands, and specifically as your
partners.
Our future plans with respect to Stratasys
following the successful completion of the special tender offer ARE
ONLY to buy the rest of Stratasys shares as soon as practical and
legally permitted and pursue a negotiated combination of Stratasys
as part of a sought-after industry consolidation, be it with 3D
System or other strategic alternatives.”
I have personally invested money, millions of
dollars, from my own family savings, in NANO shares. I have never
received any stock options or RSUs. All my equity in the company
was paid for from my own savings, one way or another. My future
upside is going to be like my fellow investors: share price of Nano
and Stratasys – if you choose to join us.
I encourage you to compare this to your own
Board, their lack of financial investment in your company, their
actions indicating personal motivations, and their discombobulated
behavior with two third-party buyout offers. The final judgment, as
the ultimate decision, should not be with the Court. IT IS IN YOUR
HANDS!
Should you decide to reject our offer, Nano
Dimension will accept such result respectfully. We shall review our
investment in Stratasys, including our intention to dispose of our
14.1% ownership in Stratasys as soon as possible and wish you
success in all your endeavors.”
VOTE AGAINST THEM!
Nano Dimension Chairman & CEO in a Video
Message to Stratasys Shareholders:
https://www.youtube.com/watch?v=jWlFh9Wie-U
LEARN MORE ABOUT NANO DIMENSION, ITS
STRATEGY AND VISION,INCLUDING ITS SPECIAL TENDER
OFFER FOR STRATASYS AND HOW TO VOTE FOR NANO DIRECTORS
AT www.stratasysvaluenow.com
FOR INFORMATION ON HOW TO TENDER
STRATASYS SHARES, CALL GEORGESON, THE INFORMATION AGENT FOR THE
SPECIAL TENDER OFFER, TOLL-FREE AT (877) 668-1646
Important Information About the Special
Tender Offer This press release is for informational
purposes only and is neither an offer to purchase nor a
solicitation of an offer to sell any ordinary shares of Stratasys
or any other securities, nor is it a substitute for the tender
offer materials described herein. A tender offer statement on
Schedule TO, including an offer to purchase, a related letter of
transmittal and other tender offer documents, was filed with the
SEC by Nano Dimension on May 25, 2023, as subsequently amended and
supplemented. Stratasys filed with the SEC a
solicitation/recommendation statement on Schedule 14D-9, as
required by the tender offer rules, on May 30, 2023, as
subsequently amended.
INVESTORS AND SECURITY HOLDERS ARE URGED TO
CAREFULLY READ BOTH THE TENDER OFFER MATERIALS (INCLUDING THE OFFER
TO PURCHASE, RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER
OFFER DOCUMENTS) AND THE SOLICITATION/RECOMMENDATION STATEMENT ON
SCHEDULE 14D-9 REGARDING THE OFFER, AS THEY MAY BE AMENDED
FROM TIME TO TIME, BECAUSE THEY CONTAIN AND WILL CONTAIN IMPORTANT
INFORMATION THAT INVESTORS AND SECURITY HOLDERS SHOULD CONSIDER
BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR
SECURITIES.
Investors and security holders may obtain a free
copy of the offer to purchase, the related letter of transmittal,
certain other tender offer documents and the
solicitation/recommendation Statement and other documents filed
with the SEC at the website maintained by the SEC
at www.sec.gov or by directing such requests to Georgeson
LLC, the information agent for the tender offer, named in the
tender offer statement. In addition, Stratasys files annual
reports, interim financial statements and other information, and
Nano Dimension files annual reports, interim financial statements
and other information with the SEC, which are available to the
public at the SEC’s website at www.sec.gov. Copies of the
documents filed with the SEC by Stratasys may be obtained at no
charge on the investor relations page of Stratasys’ website
at www.stratasys.com. Copies of the documents filed with the
SEC by Nano Dimension may be obtained at no charge on the investor
relations page of Nano Dimension’s website
at www.nano-di.com.
About Nano DimensionNano
Dimension’s (Nasdaq: NNDM) vision is to transform existing
electronics and mechanical manufacturing into Industry 4.0
environmentally friendly & economically efficient precision
additive electronics and manufacturing – by delivering solutions
that convert digital designs to electronic or mechanical devices -
on demand, anytime, anywhere.
Nano Dimension’s strategy is driven by the
application of deep learning-based AI to drive improvements in
manufacturing capabilities by using self-learning &
self-improving systems, along with the management of a distributed
manufacturing network via the cloud.
Nano Dimension serves over 2,000 customers
across vertical target markets such as aerospace & defense,
advanced automotive, high-tech industrial, specialty medical
technology, R&D and academia. The company designs and
makes Additive Electronics and Additive Manufacturing 3D
printing machines and consumable materials. Additive Electronics
are manufacturing machines that enable the design and development
of High-Performance-Electronic-Devices (Hi-PED®s). Additive
Manufacturing includes manufacturing solutions for production of
metal, ceramic, and specialty polymers-based applications - from
millimeters to several centimeters in size with micron
precision.
Through the integration of its portfolio of
products, Nano Dimension is offering the advantages of rapid
prototyping, high-mix-low-volume production, IP security, minimal
environmental footprint, and design-for-manufacturing capabilities,
which is all unleashed with the limitless possibilities of additive
manufacturing.
For more information, please
visit www.nano-di.com.
Forward Looking Statements
This press release contains forward-looking
statements within the meaning of the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995 and other
Federal securities laws. Words such as “expects,” “anticipates,”
“intends,” “plans,” “believes,” “seeks,” “estimates,” and similar
expressions or variations of such words are intended to identify
forward-looking statements. For example, Nano Dimension is using
forward-looking statements in this press release when it discusses
its intention to replace the current Board of Directors of
Stratasys with its own nominees and its plans for Stratasys
assuming the successful completion of the special tender offer.
Because such statements deal with future events and are based on
Nano Dimension’s current expectations, they are subject to various
risks and uncertainties. Actual results, performance, or
achievements of Nano Dimension could differ materially from those
described in or implied by the statements in this press release.
The forward-looking statements contained or implied in this press
release are subject to other risks and uncertainties, including
those discussed under the heading “Risk Factors” in Nano
Dimension’s annual report on Form 20-F filed with the Securities
and Exchange Commission (“SEC”) on March 30, 2023, and in any
subsequent filings with the SEC. Except as otherwise required by
law, Nano Dimension undertakes no obligation to publicly release
any revisions to these forward-looking statements to reflect events
or circumstances after the date hereof or to reflect the occurrence
of unanticipated events. References and links to websites have been
provided as a convenience, and the information contained on such
websites is not incorporated by reference into this press release.
Nano Dimension is not responsible for the contents of third-party
websites.
NANO DIMENSION INVESTOR RELATIONS CONTACT
Investor Relations | ir@nano-di.com
1 Stratasys Ltd. (NASDAQ: SSYS) Form 20-F Filing for Fiscal Year
2022, filed March 3rd, 2023; Director Compensation and
Director/Officer Equity Compensation
2 https://en.globes.co.il/en/article-hapoalim-chairman-yair-seroussi-resigns-1001163746
3 https://en.globes.co.il/en/article-former-hapoalim-execs-to-repay-nis-225m-1001451149
4 Decline of 6% from $283 million in 2005 to $265 million in
2014
https://www.globes.co.il/news/article.aspx?did=1000138395https://www.calcalist.co.il/local/articles/0,7340,L-3699528,00.html
5 https://www.globes.co.il/news/article.aspx?did=1001307825
6
https://investors.stratasys.com/sec-filings/annual-reports/content/0001206774-14-000690/0001206774-14-000690.pdf
7 https://www.reuters.com/article/idUS377836052120130619
8 12/31/2023 High $136.87 – 12/31/2015 Low $23.36
9 CASE 0:15-cv-00455-PJS-FLN
https://cdn-shop.adafruit.com/pdfs/makerbot/classaction.pdf
10 https://www.themarker.com/markets/2016-06-05/ty-article/0000017f-dfa8-db22-a17f-ffb96c110000
11 https://www.3ders.org/articles/20170726-stratasys-cleared-of-fraud-charges-over-comments-about-makerbot-replicator-3d-printers.html
12 https://www.calcalist.co.il/local/articles/0,7340,L-3391504,00.html
13 https://www.themarker.com/career/2005-02-10/ty-article/0000017f-dec5-d3a5-af7f-feef2d5d0000
14 https://www.ynet.co.il/articles/1,7340,L-2255994,00.html
15 Stratasys Ltd. (NASDAQ:SSYS) 20-F Fillings for Fiscal Year
2015; https://www.globes.co.il/news/article.aspx?did=1001111985
16 Stratasys Ltd. (NASDAQ:SSYS) 20-F Fillings for Fiscal Year
2015; https://www.globes.co.il/news/article.aspx?did=1001111985
17 https://www.themarker.com/technation/2018-07-11/ty-article/0000017f-e11e-d9aa-afff-f95e26630000
18 https://3dprint.com/301482/origin-shareholders-sue-stratasys-related-to-breach-of-acquisition-agreement/?utm_source=dlvr.it&utm_medium=linkedin
19 Stratasys Ltd. (NASDAQ:SSYS) 20-F Fillings for Fiscal Year
2020
20 https://investors.stratasys.com/sec-filings/all-sec-filings/content/0001213900-22-025940/0001213900-22-025940.pdf
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