3D printing leader Stratasys Ltd. has called off its merger with Desktop Metal Inc. after its shareholders voted down terms of the previously announced agreement.
The Stratasys board now is exploring strategic alternatives for the company, based in Rehovot, Israel. In a Sept. 28 news release, officials said those steps could include a strategic transaction, potential merger, business combination or sale.
"We have decided to undertake a comprehensive and thorough review of all available strategic alternatives," said Dov Ofer, chairman of Stratasys' board of directors.
"We are entering this review as the leader in the additive manufacturing space and will continue to execute our strategy, powered by innovation and profitable growth, which has led Stratasys to outpace the competition," Ofer said in the release.
Stratasys and Burlington, Mass.-based Desktop Metal had announced the merger in May. It would have been an all-stock deal valued at $1.8 billion. Both firms are leaders in the 3D printing market and have complementary products. The combined firm was expected to generate sales of $1.1 billion by 2025.
The deal was approved by both firms' boards but needed shareholder approval. Existing Stratasys shareholders would have owned approximately 59 percent of the combined firm, with legacy Desktop Metal stockholders owning the remaining 41 percent.
The merger would have ended a tumultuous period for Stratasys, which rejected several buyout offers from Nano Dimension Ltd. earlier this year, most recently in mid-April. Stratasys officials said at the time that the offer "continues to substantially undervalue Stratasys … and is not in the best interests of Stratasys and its shareholders."
The Nano deal valued Stratasys at almost $1.4 billion.
Waltham, Mass.-based Nano is the largest shareholder in Stratasys, with a stake of 14.5 percent. Both firms are major suppliers of 3D printers, materials and technology. Desktop Metal posted sales of $209 million in 2022 but reported a loss of $740 million. Officials expected sales for 2023 to be between $210 million and $260 million.
On Aug. 31, Stratasys completed the sale of the Stratasys Direct urethane facilities in Poway, Calif., to the Lamarjean Group, which operates as PolyCraft Tech. That business is based in Eden Prairie, Minn.
No purchase price was disclosed in the sale. Stratasys Direct is the on-demand parts service unit of Stratasys. Officials said in a news release that the decision to sell the "noncore" urethane facilities is part of an operational transformation that began in early 2023.
In fiscal year 2022, Stratasys had sales of about $650 million but posted a loss of almost $29 million. Earlier this year, Stratasys completed its purchase of Covestro's additive manufacturing business for almost $44 million.
On Wall Street, Stratasys' stock price began the year under $12 and peaked above $20 in mid-July, but it had declined to $13.40 in early trading Oct. 2.