Why Desktop Metal (DM) Stock Is Trading Higher Premarket Today

  • Desktop Metal, Inc DM stock gained Thursday after it agreed to combine with Stratasys, Ltd SSYS under an all-stock transaction worth $1.8 billion or $1.88 per share of Desktop Metal.
  • Desktop Metal stockholders will receive 0.123 ordinary shares of Stratasys for each share of Desktop Metal Class A common stock.
  • The purchase consideration implies a premium of 7.4% to Desktop Metal's May 24 closing of $1.75.
  • The transaction merges the polymer strengths of Stratasys with the complementary industrial mass production leadership of Desktop Metal's brands, creating an additive manufacturing company likely to be well-positioned to serve customers' evolving needs in manufacturing.
  • The combined company will likely generate approximately $50 million in additional annual run-rate cost synergies by 2025, targeting 10%-12% adjusted EBITDA margins in 2025.
  • Stratasys and Desktop Metal will likely generate $1.1 billion in 2025 revenue, with significant upside potential in a total addressable market of over $100 billion by 2032.
  • Stratasys shareholders will own approximately 59% of the combined company, and legacy Desktop Metal stockholders will hold about 41%.
  • Stratasys CEO Dr. Yoav Zeif will lead the combined company as CEO, with Desktop Metal Co-founder, Chair, and CEO Ric Fulop as Chairman of the Board. 
  • Price Action: DM shares traded higher by 5.71% at $1.85 premarket on the last check Thursday.
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