Desktop Metal, Inc. (NYSE:DM) shares are trading higher after it inked a definitive deal with Nano Dimension Ltd. (NASDAQ:NNDM), under which, Nano Dimension will fully acquire Desktop Metal in an all-cash deal at $5.50 per share.

The deal offers a 27.3% premium over Desktop Metal’s closing price and a 20.5% premium over the 30-day VWAP as of July 2, 2024, totaling approximately $183 million.

The purchase price can be adjusted based on certain assumptions. If the deal extends into 2025, Nano Dimension will provide Desktop Metal a $20 million secured loan facility. Any draw on this facility before closing could adjust the purchase price by up to $0.80 per share. If all adjustments are made, the price will be $4.07 per share, totaling $135 million in consideration.

Nano Dimension intends to fund the acquisition using its current cash reserves. After the transaction, the combined company expects a strong cash position of about $665 million at $5.50 per share or $680 million at $4.07 per share price, factoring in Desktop Metal’s outstanding convertible notes, which may be repurchased pending acceptance unless refinanced.

The merged entity is expected to leverage increased scale and diversification, achieving a 2023 combined revenue of $246 million, with 28% derived from recurring revenue streams encompassing services and consumables.

Desktop Metal anticipates transaction costs of around $11 million, which could reduce earnings by approximately $0.44 per share. The maximum potential reduction, accounting for expenses, is estimated at $0.63 per share.

The transaction, approved unanimously by both companies’ Boards of Directors, is expected to close in the fourth quarter of 2024, subject to customary closing conditions.

Yoav Stern, Nano Dimension’s Chief Executive Officer and member of the Board of Directors, said, “Our combination with Desktop Metal is another step in Nano Dimension’s evolution to become the leader in digital manufacturing, with capabilities in mass manufacturing for critical industrial applications.”

Ric Fulop, Desktop Metal’s Co-Founder and Chief Executive Officer, said, “We’re excited to bring together our pioneering, complementary product portfolios that will further enhance our ability to serve our customers in high-growth industries with a more complete offering of digital manufacturing technologies for metal, electronics, casting, polymer, micro-polymer and ceramics applications.”

As of March-end, Nano Dimension held $793.08 million in cash and equivalents.

Price Action: DM shares are up 6.25% at $4.59 premarket at the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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